Yesterday, Avantor had an unusually high Vol/OI ratio on a $9 put option due to increased calls to join a class action lawsuit against the company, with volume surging to 73,647 shares. Investors are split on the stock’s future, with some looking for downside protection while others anticipate the stock won’t fall below $9.
The $9 put option in question had a Vol/OI ratio of 437.51, with four significant trades accounting for almost all of the volume. The bid and ask prices ranged from $0.05 to $0.10 per contract, offering a potential annualized return of 6.8% for sellers.
Investors selling Cash-Secured Puts may face assignment if AVTR falls by 19.4% to the breakeven of $8.95, potentially leading to the purchase of 100 shares at $9. However, if the company rebounds, the short put could yield significant profits, considering its past trading history.
A class action complaint alleges Avantor misled investors about its competitive positioning, leading to deteriorating financial metrics over the past five years. With declining return on assets and revenue growth, uncertainties surround the company’s future performance.
Long $9 put options offer downside protection at a relatively low cost, with a breakeven price 21% below yesterday’s close. Despite a Strong Sell technical opinion on AVTR, analysts project a 10.21% expected move over the next month, potentially driving the stock price lower.
With only 4 out of 18 analysts rating AVTR as a Buy, skepticism surrounds the stock’s future performance. The average analyst rating has fallen in recent months, although the 12-month target price remains 20% above the current price. Avantor’s Q4 2025 results on Feb. 6 could significantly impact its stock price. Investors can limit losses and profit from potential upside using a married puts strategy with Avantor $9 put options. The maximum loss is $2.19, with a profit of $2.90 if the share price is $14.09 at expiration and a loss of $1.99 if it’s $8.09. Consider your risk tolerance before owning AVTR stock.
Read more at Barchart: This Unusually Active Avantor Put Raises the Question: Who’s the Patsy?