December 2026 Options Now Available For Alkermes (ALKS)

Analysis highlights two options strategies for Alkermes plc (ALKS), currently trading at $28.26, offering distinct risk-reward profiles. Selling a $27.00 strike put for a $2.00 premium provides a potential entry at an effective $25.00 (a 4% discount), with a 67% probability of expiring worthless and yielding 7.41% (5.81% annualized). Conversely, a covered call strategy involves selling a $32.00 strike call for $2.50, potentially generating a 22.08% total return if called away by December 2026, or an 8.85% (6.94% annualized) premium if the call expires worthless (45% probability). These options leverage implied volatilities of 48% (put) and 46% (call), compared to ALKS's 35% trailing actual volatility, suggesting potential opportunities for income generation or discounted share acquisition.

Analysis

The analysis of Alkermes plc (ALKS), currently trading at $28.26, centers on two distinct, long-dated options strategies expiring in December 2026. The first is selling a cash-secured put at the $27.00 strike for a $2.00 premium, which establishes a potential acquisition cost basis of $25.00 per share. This strategy presents a 67% probability of the option expiring worthless, in which case the seller would realize a 7.41% return on the cash commitment (5.81% annualized). The second strategy is a covered call, involving the sale of a $32.00 strike call for a $2.50 premium against an existing stock position. This caps the potential total return at 22.08% if the shares are called away, but offers an 8.85% premium boost (6.94% annualized) if the option expires worthless, an event with a 45% probability. A key observation is the significant spread between the options' implied volatilities (48% for the put, 46% for the call) and the stock's trailing twelve-month actual volatility of 35%, suggesting that options premiums are currently elevated relative to the stock's recent price behavior.

Key Decisions for Investors

• Investors bullish on ALKS who are seeking a lower entry point could consider selling the $27.00 strike put to either acquire shares at an effective price of $25.00 or generate a 7.41% return on collateral.
• Current ALKS shareholders could evaluate the covered call strategy at the $32.00 strike to generate income, but must accept that this caps upside potential, limiting total return to 22.08% if the stock is called away by expiration.
• The notable premium of implied volatility (46-48%) over historical volatility (35%) suggests that selling options on ALKS may be an attractive strategy for generating yield, as the market is pricing in greater future price swings than the stock has recently exhibited.