Bit Digital Inc. (BTBT) options offer institutional investors opportunities for enhanced yield or discounted share acquisition, with current contracts exhibiting high implied volatility. A cash-secured put at the $3.50 strike, currently 10% out-of-the-money, provides a potential 57.90% annualized yield if it expires worthless, or an effective entry price of $3.10. Alternatively, a covered call at the $4.00 strike could generate an 85.10% annualized premium if unexercised, or a 20.16% total return if called away by December 19th, leveraging implied volatilities of 115-127% compared to BTBT's 98% historical volatility.
The put contract at the $3.50 strike price has a current bid of 40 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $3.50, but will also collect the premium, putting the cost basis of the shares at $3.10 (before broker commissions). To an investor already interested in purchasing shares of BTBT, that could represent an attractive alternative to paying $3.87/share today. Because the $3.50 strike represents an approximate 10% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 67%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 11.43% return on the cash commitment, or 57.90% annualized — at Stock Options Channel we call this the YieldBoost. Below is a chart showing the trailing twelve month trading history for Bit Digital Inc, and highlighting in green where the $3.50 strike is located relative to that history: Turning to the calls side of the option chain, the call contract at the $4.00 strike price has a current bid of 65 cents. If an investor was to purchase shares of BTBT stock at the current price level of $3.87/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $4.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 20.16% if the stock gets called away at the December 19th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if BTBT shares really soar, which is why looking at the trailing twelve month trading history for Bit Digital Inc, as well as studying the business fundamentals becomes important. Below is a chart showing BTBT's trailing twelve month trading history, with the $4.00 strike highlighted in red: Considering the fact that the $4.00 strike represents an approximate 3% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 41%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 16.80% boost of extra return to the investor, or 85.10% annualized, which we refer to as the YieldBoost. The implied volatility in the put contract example is 115%, while the implied volatility in the call contract example is 127%. Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 250 trading day closing values as well as today's price of $3.87) to be 98%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com. Top YieldBoost Calls of the S&P 500 » Also see: JMEE Videos Top Ten Hedge Funds Holding ASX Top Ten Hedge Funds Holding LFAX The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Bit Digital Inc. (BTBT) presents distinct options-based strategies capitalizing on its current trading price of $3.87/share and elevated implied volatility. Implied volatility for both put (115%) and call (127%) contracts significantly exceeds the 98% trailing twelve-month historical volatility, suggesting rich premiums for options sellers. A cash-secured put strategy at the $3.50 strike, currently 10% out-of-the-money, offers a 40-cent premium. This translates to a potential 57.90% annualized return (YieldBoost) if the contract expires worthless (a 67% probability), or an effective share acquisition price of $3.10 if assigned before commissions. Alternatively, a covered call at the $4.00 strike, 3% out-of-the-money, provides a 65-cent premium. This could yield an 85.10% annualized return (YieldBoost) if unexercised (a 41% probability), or a 20.16% total return by December 19th if the shares are called away before commissions. These strategies allow institutional investors to generate income or acquire shares at a discount, leveraging the stock's current volatility. However, they inherently involve either limiting upside potential in a strong rally or committing capital for potential share acquisition, aligning with the "speculative" market tone.
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