Commit To Buy 10x Genomics At $10, Earn 20.3% Annualized Using Options

The article presents an analysis of selling February 2026 $10 put options on 10x Genomics (TXG), offering a 20.3% annualized return, while noting the risk of assignment if TXG shares decline 24.9% from their current $13.27, a scenario amplified by the stock's 72% trailing twelve-month volatility. This specific options strategy is contextualized by broader market indicators, with the S&P 500's put:call ratio at 0.72, exceeding its long-term median of 0.65, suggesting higher-than-expected put buying activity across the market.

Analysis

The analysis centers on a high-yield options strategy for 10x Genomics (TXG), specifically the selling of a February 2026 put option at a $10 strike. This strategy offers a significant 20.3% annualized return based on the premium collected. However, this return is paired with substantial risk, as the seller would be obligated to purchase TXG shares if the stock price declines by 24.9% from its current $13.27 to below the $10 strike. The article underscores that the stock's high trailing twelve-month volatility of 72% makes such a price move a material possibility, thereby justifying the high premium. If the option is exercised, the seller's effective cost basis on the shares would be $9.05. The broader market context provided, a higher-than-normal S&P 500 put:call ratio of 0.72 versus a median of 0.65, suggests a more cautious or bearish investor positioning in the market, which could be a headwind for a high-volatility name like TXG.

Key Decisions for Investors

• Investors comfortable with high volatility and seeking yield might consider selling this put, provided they are also comfortable owning TXG stock at an effective cost basis of $9.05 per share.
• The strategy's primary risk is the stock's 72% historical volatility, which indicates the 24.9% price decline required for assignment is a realistic scenario; therefore, this trade is unsuitable for risk-averse investors.
• A key decision point is whether the 20.3% annualized return offers sufficient compensation for the assignment risk, a judgment that should be informed by fundamental analysis of 10x Genomics' long-term prospects.