Agree To Purchase Zebra Technologies At $200, Earn 5.5% Using Options

An analysis recommends selling a December 2026 put option on Zebra Technologies Corp. (ZBRA) at a $200 strike, projecting an annualized return of 4.9%. With ZBRA currently priced at $261.31 and exhibiting 45% trailing twelve-month volatility, this strategy would lead to share assignment at a cost basis of $189.10 if the stock declines 23.9% to the strike price.

Analysis

The article details a strategy involving selling a December 2026 put option on Zebra Technologies Corp. (ZBRA) at a $200 strike price, which offers a 4.9% annualized rate of return from premium collection. With ZBRA currently trading at $261.31, the primary upside for the put seller is limited to this premium, unless the contract is exercised.

Should ZBRA shares decline by 23.9% to the $200 strike price, the put would be exercised, resulting in an effective cost basis of $189.10 per share for the seller after accounting for the premium. This scenario implies the investor would acquire ZBRA shares at a significant discount to the current market price.

ZBRA's trailing twelve-month volatility stands at 45%, a significant factor in assessing the risk profile of this options strategy. This high volatility indicates a potential for substantial price movements, which could lead to the put being exercised and shares assigned. The analysis suggests evaluating the 4.9% annualized premium against the possibility of acquiring shares at the $189.10 cost basis in a volatile market.

Key Decisions for Investors

• Evaluate the 4.9% annualized premium return against the potential obligation to acquire ZBRA shares at a $189.10 cost basis if the $200 put is exercised.
• Consider ZBRA's 45% trailing twelve-month volatility, which suggests a higher probability of significant price movements and potential assignment.
• Assess the long-term fundamental outlook for ZBRA to determine if acquiring shares at a ~28% discount to current market price ($189.10 vs $261.31) aligns with portfolio objectives.