Interesting CHWY Put And Call Options For December 2026

The article outlines two options strategies for Chewy Inc. (CHWY), currently trading at $33.22. Selling a $32.50 strike put contract for a $3.95 premium offers a potential 11.01% annualized return if it expires worthless (65% probability), effectively lowering the acquisition cost to $28.55 for investors. Alternatively, a covered call strategy using a $37.50 strike call for a $4.15 premium could yield a 25.38% total return if CHWY is called away by December 2026, or an 11.31% annualized premium boost if the option expires worthless (46% probability).

Analysis

The article outlines two distinct options strategies for Chewy Inc. (CHWY), currently trading at $33.22, aimed at generating income or optimizing entry/exit points. These strategies leverage CHWY's current valuation and volatility to offer defined risk/reward profiles for investors.

For investors interested in acquiring CHWY, selling a $32.50 strike put contract for a $3.95 premium offers a potential entry at an effective cost basis of $28.55. This out-of-the-money put, representing a 2% discount, has a 65% probability of expiring worthless, yielding an 11.01% annualized return on the cash commitment.

Alternatively, a covered call strategy involves purchasing CHWY shares at $33.22 and selling a $37.50 strike call for $4.15, expiring in December 2026. This strategy could yield a 25.38% total return if shares are called away, or an 11.31% annualized premium boost if the 13% out-of-the-money call expires worthless, which has a 46% probability.

The implied volatility for both option contracts stands at approximately 49%, slightly above CHWY's trailing twelve-month actual volatility of 44%. This higher implied volatility suggests options premiums may be attractive, offering enhanced income potential for these defined-risk strategies.

Key Decisions for Investors

• Investors with a long-term bullish outlook on CHWY should consider the $32.50 strike put strategy to potentially acquire shares at a lower effective price of $28.55 or earn an 11.01% annualized return if the option expires worthless.
• Current CHWY shareholders seeking to enhance portfolio yield could implement the $37.50 strike covered call strategy, which offers a 25.38% total return if shares are called away or an 11.31% annualized premium boost if the option expires worthless.
• Given the implied volatility of 49% exceeding the 44% historical volatility, these option premiums offer an attractive yield for defined-risk strategies, but investors must be comfortable with the potential outcomes of each trade.