December 12th Options Now Available For Galaxy Digital (GLXY)

The article analyzes potential options strategies for Galaxy Digital Inc. (GLXY), currently priced at $34.95 per share. It highlights selling a $28.00 strike put for a $1.05 premium, which could result in a 3.75% return (31.80% annualized) if the 20% out-of-the-money contract expires worthless, or an effective acquisition cost of $26.95. Concurrently, a covered call strategy involving buying GLXY and selling a $36.00 strike call for $2.55 is presented, offering a potential 10.30% return by the December 12th expiration if the stock is called away, or a 61.87% annualized 'YieldBoost' if the 3% out-of-the-money call expires worthless.

Analysis

Galaxy Digital Inc. (GLXY), currently trading at $34.95 per share, presents opportunities for options-based income generation and strategic entry points. A cash-secured put strategy at the $28.00 strike, which is approximately 20% out-of-the-money, offers a $1.05 premium. This strategy implies an effective purchase price of $26.95 if assigned, or a 3.75% return (31.80% annualized YieldBoost) if the contract expires worthless, with an 80% probability of this outcome.

For existing GLXY shareholders, a covered call strategy utilizing the $36.00 strike, approximately 3% out-of-the-money, yields a $2.55 premium. This could result in a 10.30% total return by the December 12th expiration if shares are called away, or a 7.30% return (61.87% annualized YieldBoost) if the call expires worthless, with a 46% chance of this occurring.

The implied volatility for the put contract is 97% and 95% for the call contract, both exceeding GLXY's trailing twelve-month actual volatility of 89%. This suggests that options premiums are pricing in higher future price fluctuations compared to historical movements. The overall sentiment surrounding these strategies is mildly positive, with a neutral tone.

These strategies offer distinct risk-reward profiles: the put strategy targets a lower entry point or income from a significant downside buffer, while the covered call aims to enhance returns for current holders by monetizing upside potential up to the strike price. Both leverage elevated implied volatility to generate attractive annualized returns.

Key Decisions for Investors

• Consider implementing a cash-secured put strategy at the $28.00 strike for GLXY to either acquire shares at a 20% discount ($26.95 effective cost) or generate a 31.80% annualized income if the stock remains above the strike.
• For current GLXY holders, evaluate selling covered calls at the $36.00 strike to potentially achieve a 10.30% return if shares are called away or a 61.87% annualized YieldBoost if the option expires worthless, while acknowledging capped upside.
• Factor in the elevated implied volatility (95-97%) relative to historical volatility (89%), which suggests options premiums are rich and may favor selling strategies, but also indicates market expectations of increased price swings in GLXY.