The Online Investor
OLI Premium
Contrarian Outlook
Stock Option Ideas
Preferred Stock Newsletter
ChartZero.com

Interesting RLMD Put And Call Options For September 2023

By The Online Investor Staff, Monday, October 3, 11:25 AM ET

Investors in Relmada Therapeutics Inc (NASDAQ:RLMD) saw new options begin trading today, for the September 2023 expiration. One of the key data points that goes into the price an option buyer is willing to pay, is the time value, so with 347 days until expiration the newly trading contracts represent a potential opportunity for sellers of puts or calls to achieve a higher premium than would be available for the contracts with a closer expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the RLMD options chain for the new September 2023 contracts and identified one put and one call contract of particular interest.

The put contract at the $35.00 strike price has a current bid of $15.60. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $35.00, but will also collect the premium, putting the cost basis of the shares at $19.40 (before broker commissions). To an investor already interested in purchasing shares of RLMD, that could represent an attractive alternative to paying $36.89/share today.

Because the $35.00 strike represents an approximate 5% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 44.57% return on the cash commitment, or 46.88% annualized — at Stock Options Channel we call this the YieldBoost.

Below is a chart showing the trailing twelve month trading history for Relmada Therapeutics Inc, and highlighting in green where the $35.00 strike is located relative to that history:

Turning to the calls side of the option chain, the call contract at the $40.00 strike price has a current bid of $17.00. If an investor was to purchase shares of RLMD stock at the current price level of $36.89/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $40.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 54.51% if the stock gets called away at the September 2023 expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if RLMD shares really soar, which is why looking at the trailing twelve month trading history for Relmada Therapeutics Inc, as well as studying the business fundamentals becomes important. Below is a chart showing RLMD's trailing twelve month trading history, with the $40.00 strike highlighted in red:

Considering the fact that the $40.00 strike represents an approximate 8% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 46.08% boost of extra return to the investor, or 48.47% annualized, which we refer to as the YieldBoost.

Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 251 trading day closing values as well as today's price of $36.89) to be 62%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.

Find the right mix of model portfolios today at PortfolioChannel.com


This Article's Word Cloud:   Arial   Channel   Options   RLMD   Relmada   September   Stock   Therapeutics   YieldBoost   also   call   chart   contract   contracts   covered   current   data   expiration   expire   fillColor   greeks   history   investor   left   month   odds   option   options   premium   price   represent   return   sell   shares   stock   strike   that   they   this   those   time   today   trading   trailing   twelve   which   will   with   worthless   would

Interesting RLMD Put And Call Options For September 2023 | www.TheOnlineInvestor.com | Copyright © 1998 - 2024, All Rights Reserved

Nothing in The Online Investor is intended to be investment advice, nor does it represent the opinion of, counsel from, or recommendations by BNK Invest Inc. or any of its affiliates, subsidiaries or partners. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person. All viewers agree that under no circumstances will BNK Invest, Inc,. its subsidiaries, partners, officers, employees, affiliates, or agents be held liable for any loss or damage caused by your reliance on information obtained. By visiting, using or viewing this site, you agree to the following Full Disclaimer & Terms of Service. Video widget and stock market videos powered by Market News Video. Quote data delayed at least 20 minutes, powered by Ticker Technologies, and Mergent. Contact The Online Investor; Meet Our Editorial Staff.