December 12th Options Now Available For SoFi Technologies

An analysis of options strategies for SoFi Technologies Inc (SOFI), currently priced at $30.04, highlights potential returns for investors. Selling a $29.00 strike put contract, with a 62% chance of expiring worthless, offers a 6.10% return (51.76% annualized) and an effective purchase basis of $27.23 if assigned. Alternatively, a covered call strategy using a $31.00 strike yields a 10.42% total return if SOFI is called away by December 12th, or a 7.22% premium boost (61.26% annualized) if the call expires worthless, with a 50% probability. The analysis notes implied volatilities of 65% for the put and 68% for the call, compared to SOFI's 62% trailing actual volatility.

Analysis

The article details two distinct options strategies for SoFi Technologies Inc (SOFI), currently trading at $30.04, presenting avenues for either discounted share acquisition or enhanced yield. These strategies leverage SOFI's current market price and volatility characteristics.

A sell-to-open $29.00 strike put contract, with a bid of $1.77, offers a potential cost basis of $27.23 if assigned, representing an approximate 3% discount to the current price. This out-of-the-money put has a 62% probability of expiring worthless, which would yield a 6.10% return (51.76% annualized) from the collected premium.

Conversely, a covered call strategy utilizing a $31.00 strike call, with a bid of $2.17, provides a 10.42% total return if SOFI shares are called away by the December 12th expiration. Should the call expire worthless, which has a 50% probability, the premium generates a 7.22% boost (61.26% annualized) to the investor's return.

Implied volatilities for the put (65%) and call (68%) are marginally above SOFI's trailing twelve-month actual volatility of 62%. This suggests that options premiums may be somewhat elevated relative to historical price movements, potentially favoring option sellers in terms of premium capture.

Key Decisions for Investors

• Investors seeking to acquire SOFI shares at a discount should evaluate selling the $29.00 strike put to potentially achieve a $27.23 effective entry price or collect a 51.76% annualized premium if unassigned.
• Current SOFI shareholders aiming to enhance portfolio yield could consider a covered call strategy at the $31.00 strike, offering a 10.42% potential return if called away or a 61.26% annualized premium boost if the option expires worthless.
• Given implied volatilities are slightly higher than historical actual volatility, investors selling options may benefit from potentially richer premiums, but should weigh this against the trade-off of limited upside participation or potential assignment risk.