Commit To Purchase D-Wave Quantum At $13, Earn 36.5% Using Options

An analysis of D-Wave Quantum Inc (QBTS) highlights the potential for a 16.7% annualized return from selling a January 2028 put option with a $13 strike price. This strategy implies significant risk, as the stock, currently trading at $24.25, would need to fall 46.3% for the option to be exercised, leading to an effective cost basis of $8.25 per share, against a backdrop of 164% trailing twelve-month volatility.

Analysis

The article details a strategy of selling a January 2028 put option on D-Wave Quantum Inc (QBTS) at a $13 strike price, which offers a 16.7% annualized rate of return. This approach is designed for premium collection, with share acquisition occurring only if the contract is exercised.

For the put to be exercised, QBTS shares, currently priced at $24.25, would need to fall by 46.3% to or below the $13 strike. Should this occur, the put seller would acquire shares at an effective cost basis of $8.25 per share, prior to commissions.

The trailing twelve-month volatility for QBTS is exceptionally high at 164%, indicating significant price instability. This elevated volatility, coupled with the substantial downside required for exercise, highlights the speculative nature of the strategy, aligning with the mixed sentiment and low market impact signals.

Key Decisions for Investors

• Investors should thoroughly evaluate the high 164% trailing twelve-month volatility of QBTS and the significant 46.3% price decline necessary for the $13 strike put option to be exercised
• Consider the potential cost basis of $8.25 per share if assigned, ensuring it aligns with your long-term view and risk tolerance for D-Wave Quantum Inc
• Given the speculative tone and mixed sentiment surrounding this options play, it should be approached as a premium collection strategy with notable tail risk rather than a direct equity investment