December 19th Options Now Available For SoFi Technologies (SOFI)

Analysis of SOFI options reveals potential strategies for investors: selling the $11 put offers a 3.55% return (6.31% annualized) with a 74% chance of expiring worthless, while a covered call strategy at the $15 strike could yield 18.07% if the stock is called away by the December 19th expiration. The implied volatility for the put and call contracts are 81% and 63% respectively, compared to the stock's 61% trailing twelve month volatility.

Analysis

The article outlines two specific options strategies for SoFi Technologies Inc. (SOFI), which is currently trading at $13.28 per share. For investors looking to acquire SOFI shares at a lower price, selling the $11.00 strike put contract is presented as an option; this contract has a current bid of 39 cents, leading to an effective cost basis of $10.61 per share if assigned. This strike represents an approximate 17% discount to the current share price, and analytical data estimates a 74% probability of this put expiring worthless, which would result in a 3.55% return on the cash commitment, or an annualized YieldBoost of 6.31%. Alternatively, for investors holding or purchasing SOFI shares, a covered call strategy involving selling the $15.00 strike call contract, with a current bid of 68 cents, is discussed. This strategy could yield a total return of 18.07% if SOFI shares are called away at the December 19th expiration. The $15.00 strike is approximately 13% out-of-the-money, with a 49% estimated probability of expiring worthless, in which case the premium collected would represent a 5.12% YieldBoost, or 9.12% annualized. The implied volatility is notably 81% for the put contract and 63% for the call contract, compared to SOFI's actual trailing twelve-month volatility of 61%, indicating that options markets are pricing in higher expected future price movements.

Key Decisions for Investors

• Investors interested in acquiring SOFI at a lower entry point could consider selling the $11.00 strike put, potentially securing shares at $10.61 or earning a 6.31% annualized yield if the option expires worthless, an outcome with a 74% probability.
• Existing SOFI shareholders or those initiating a position at $13.28 might evaluate selling the $15.00 strike covered call to generate income, which offers a potential 18.07% return if the stock is called away by December 19th, or a 9.12% annualized yield if the option expires worthless, though this caps upside potential beyond $15.00.
• Note the elevated implied volatilities for SOFI options (81% for the put, 63% for the call) relative to its 61% trailing historical volatility; this suggests higher premiums for option sellers but also expectations of significant price swings.
• Before engaging in these options strategies, thoroughly assess your individual risk profile and investment outlook for SOFI, as selling puts creates an obligation to buy shares and selling covered calls limits profit potential if the stock price surges significantly.