The article examines two options strategies for Workday Inc. (WDAY) shares: selling a cash-secured put at the $230 strike and a covered call at the $240 strike. The put strategy, offering an effective entry price of $221.30, could yield an annualized 32.11% if it expires worthless (60% probability). Conversely, the covered call could generate a 7.35% return by September 12th if the stock is called away, or an annualized 36.10% if the option expires worthless (53% probability), albeit capping upside. These strategies aim to enhance yield or define entry/exit points for WDAY, with implied volatilities (38-39%) slightly above the stock's trailing 12-month volatility (36%).
The provided information details two specific, yield-oriented options strategies for Workday, Inc. (WDAY). For investors seeking to initiate a position, selling a cash-secured put at the $230 strike price for an $8.70 premium offers an effective entry point at $221.30, a discount from the current share price of $232.78. This strategy carries a 60% probability of the option expiring worthless, which would generate an annualized yield of 32.11% on the cash commitment. For existing shareholders, writing a covered call at the $240 strike for a $9.90 premium presents an opportunity to generate income. This strategy could deliver a 7.35% total return if the stock is called away by the September 12th expiration, or an annualized yield boost of 36.10% if the option expires worthless, which has a 53% probability. A key technical observation is that the options' implied volatilities of 38-39% are slightly elevated compared to WDAY's trailing twelve-month actual volatility of 36%, suggesting option sellers are capturing a modest volatility premium.
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