The article analyzes specific options strategies for Western Digital (WDC) shares, currently trading at $89.04, highlighting potential 'YieldBoost' opportunities. Selling a $75.00 strike put for $0.77 offers an effective purchase price of $74.23 with an 81% chance of expiring worthless, yielding 7.49% annualized. Alternatively, selling a $90.00 strike covered call for $4.00 on existing shares provides a 5.57% return if called away, or a 32.79% annualized return if it expires worthless (55% probability). Implied volatilities for these options (48% for the put, 51% for the call) are noted relative to WDC's 46% trailing 12-month actual volatility.
The analysis focuses on two specific income-generating options strategies for Western Digital Corp (WDC), which is currently trading at $89.04 per share. For investors willing to purchase the stock at a discount, selling the $75.00 strike put contract for a $0.77 premium offers an effective cost basis of $74.23, a 16% discount from the current price. Statistical models suggest an 81% probability of this out-of-the-money put expiring worthless, which would result in a 7.49% annualized return on the cash commitment. For existing shareholders, selling a covered call at the $90.00 strike for a $4.00 premium presents an alternative. This strategy would yield a 5.57% total return if the stock is called away, or if it expires worthless (a 55% probability), it would provide an annualized yield boost of 32.79%. A key observation is that the implied volatilities for the put (48%) and call (51%) are trading slightly above the stock's trailing twelve-month actual volatility of 46%, suggesting that option premiums are relatively rich, which typically favors option sellers.
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