October 31st Options Now Available For Galaxy Digital (GLXY)

The article details two options strategies for Galaxy Digital Inc. (GLXY) shares, offering investors opportunities for enhanced yield or discounted entry. Selling the $23.50 cash-secured put, 19% out-of-the-money, yields a 5.11% premium (37.28% annualized) with a 76% chance of expiring worthless, effectively setting a $22.30 cost basis if assigned. Alternatively, a $30.00 covered call, 3% out-of-the-money, offers a 9.37% return if called away or a 6.03% premium (44.01% annualized) if it expires worthless, with a 50% probability. Implied volatility for these options (92-96%) exceeds GLXY's 88% trailing 12-month historical volatility.

Analysis

The provided text outlines two specific options strategies for Galaxy Digital Inc. (GLXY), which is trading at $29.03 per share, highlighting opportunities for income generation or discounted acquisition. The first strategy involves selling a cash-secured put at the $23.50 strike, which is approximately 19% out-of-the-money. This generates a $1.20 premium, creating an effective cost basis of $22.30 if assigned, and offers a 5.11% return on cash (37.28% annualized) if it expires worthless, an event with a 76% probability. The second strategy is a covered call at the $30.00 strike, which is 3% out-of-the-money. This could yield a total return of 9.37% if the stock is called away or a 6.03% premium boost (44.01% annualized) if it expires worthless, an outcome with a 50% probability. Critically, the implied volatility in these option contracts (92-96%) is elevated relative to the stock's trailing twelve-month actual volatility of 88%, suggesting that option premiums are currently rich compared to recent historical price movements, making option-selling strategies potentially more attractive.

Key Decisions for Investors

• Investors bullish on GLXY but seeking a more favorable entry point could consider selling the $23.50 cash-secured put to either acquire shares at an effective cost of $22.30 or generate a 37.28% annualized yield on the cash commitment.
• Existing shareholders aiming to generate income from their position could sell the $30.00 covered call, which offers a 44.01% annualized yield if the option expires worthless, but they must be willing to cap their upside and sell their shares at $30.00.
• Given that implied volatility (92-96%) is currently higher than the stock's historical volatility (88%), the market is pricing in significant future price swings, making the sale of options premium via these strategies particularly well-compensated.