The article details options strategies for Henry Schein Inc. (HSIC), currently trading at $65.70. Selling a $65.00 strike put, which has a 61% chance of expiring worthless, offers an 8.90% annualized yield boost or an effective entry price of $60.50. Alternatively, implementing a covered call strategy with a $70.00 strike call provides a potential 14.46% total return if the stock is called away by July 2026, or a 10.17% annualized yield boost if the option expires worthless (49% probability), noting implied volatilities are slightly above the 28% trailing 12-month actual volatility.
The put contract at the $65.00 strike price has a current bid of $4.50. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $65.00, but will also collect the premium, putting the cost basis of the shares at $60.50 (before broker commissions). To an investor already interested in purchasing shares of HSIC, that could represent an attractive alternative to paying $65.70/share today. Because the $65.00 strike represents an approximate 1% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 61%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 6.92% return on the cash commitment, or 8.90% annualized — at Stock Options Channel we call this the YieldBoost. Below is a chart showing the trailing twelve month trading history for Henry Schein Inc, and highlighting in green where the $65.00 strike is located relative to that history: Turning to the calls side of the option chain, the call contract at the $70.00 strike price has a current bid of $5.20. If an investor was to purchase shares of HSIC stock at the current price level of $65.70/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $70.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 14.46% if the stock gets called away at the July 2026 expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if HSIC shares really soar, which is why looking at the trailing twelve month trading history for Henry Schein Inc, as well as studying the business fundamentals becomes important. Below is a chart showing HSIC's trailing twelve month trading history, with the $70.00 strike highlighted in red: Considering the fact that the $70.00 strike represents an approximate 7% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 49%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 7.91% boost of extra return to the investor, or 10.17% annualized, which we refer to as the YieldBoost. The implied volatility in the put contract example is 32%, while the implied volatility in the call contract example is 34%. Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 249 trading day closing values as well as today's price of $65.70) to be 28%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com. Top YieldBoost Calls of the S&P 500 » Also see: Warren Buffett Stock Picks DBL YTD Return CSWI Historical Stock Prices The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Analysis of Henry Schein Inc. (HSIC), currently trading at $65.70, reveals two distinct options-based strategies for income generation and stock acquisition. The first strategy involves selling a cash-secured put with a $65.00 strike price, which could either result in acquiring the shares at an effective cost basis of $60.50 (a discount to the current market price) or, if the option expires worthless (a 61% probability), generate a 6.92% return on cash, equivalent to an 8.90% annualized yield. The second strategy is a covered call for existing shareholders, involving the sale of a $70.00 strike call for a $5.20 premium. This approach targets a 14.46% total return if the stock is called away at the July 2026 expiration, or provides a 10.17% annualized yield boost if the option expires worthless (a 49% probability), though it caps potential upside above the strike price. A key observation is the variance between implied volatility (32-34% for the options) and the actual trailing twelve-month volatility of 28%, suggesting that option premiums are currently elevated relative to the stock's recent price behavior, enhancing the appeal of option-selling strategies.
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