From Nasdaq:

Investors considering the purchase of Advanced Energy Industries Inc (Symbol: AEIS) shares may want to consider selling puts as an alternative strategy. An interesting put contract is the November 2024 put at the $85 strike, with a bid of $4.20 at the time of writing, representing a 5.6% annualized return. Selling puts doesn’t give access to AEIS’s upside potential unless the contract is exercised. The annualized 5.6% return exceeds the 0.4% annualized dividend and has a greater downside if the stock is bought at the going market price to collect the dividend.

It’s worth noting that dividend amounts are not always predictable and tend to follow company profitability. A chart below shows the trailing twelve-month trading history for Advanced Energy Industries Inc and where the $85 strike is located relative to that history. The stock’s historical volatility can be helpful to judge selling the November 2024 put at the $85 strike for the 5.6% annualized rate of return as a good reward for the risks.

In mid-afternoon trading, put volume among S&P 500 components was 1.80M contracts, with a put:call ratio of 0.85, indicating more put buyers than call buyers in options trading on the day. For more information, including top YieldBoost puts of the S&P 500, follow relevant links.



Read more: Commit To Purchase Advanced Energy Industries At $85, Earn 5.6% Annualized Using Options