Commit to buy Cushman & Wakefield at $5, earn 61.8% annualized using options

Investors considering buying shares of Cushman & Wakefield PLC (Symbol: CWK ) but wary of paying the $10.24/share market price may benefit from considering putting puts among the alternative strategies they they have them at their disposal. One particularly interesting put is the $5 strike July contract, which has a bid at the time of writing of 33 cents. Collecting this offer as a premium represents a 6.6% return on the $5 commitment, or a 61.8% annualized rate of return (at Stock Options Channel we call this YieldBoost).

Selling a put does not give an investor access to CWK’s growth potential as they would own shares, as the put seller only ends up owning shares in the scenario where the contract is exercised. And the person on the other side of the contract would only benefit from exercising at the $5 strike if doing so would produce a better outcome than selling at the market price. (Do options carry counterparty risk? This and six other common options myths debunked). So unless Cushman & Wakefield PLC sees its stock down 51.2% and the contract is exercised (resulting in a cost basis of $4.67 per share before broker fees, minus the 33 cents of 5 USD), the only benefit to the placement seller is to collect this. premium for the annualized rate of return of 61.8%.

Below is a chart showing the trailing twelve month trading history for Cushman & Wakefield PLC and highlighting in green where the $5 strike is relative to that history:

The chart above and the stock’s historical volatility can be a useful guide in combination with fundamental analysis to assess whether selling the $5 July strike for the 61.8% annualized rate of return is a good risk reward. We calculate the trailing twelve month volatility for Cushman & Wakefield PLC (taking into account the closing values ​​of the last 250 trading days as well as today’s price of $10.24) to be 45%. For other put option contract ideas at the various expirations available, visit the CWK Stock Options page on StockOptionsChannel.com.

Top YieldBoost Stock Placements with Recent Secondary »

See also:

• List of transport dividend stocks
• MRTX Options Chain
• Top Ten Hedge Funds Holding SDAG

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.