Investors in Klaviyo Inc (Symbol: KVYO) have recently seen new options begin trading, specifically for the December 19th expiration date. At Stock Options Channel, our YieldBoost formula has analyzed the KVYO options chain and identified two contracts of particular interest: one put and one call.
The put contract at the $22.50 strike price currently has a bid of 75 cents. If an investor sells-to-open this put contract, they commit to purchasing the stock at $22.50 while collecting the premium. This effectively lowers the cost basis of the shares to $21.75 (before broker commissions). For those already interested in acquiring shares of KVYO, this strategy offers an attractive alternative to buying at the current price of $23.73 per share.
Notably, the $22.50 strike represents an approximate 5% discount to the stock’s current trading price, indicating that it is out-of-the-money by that percentage. There is a possibility that the put contract may expire worthless, with current analytical data suggesting a 64% chance of this occurring. Stock Options Channel will monitor these odds over time, publishing a chart of these metrics on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would yield a 3.33% return on the cash commitment, or an impressive 19.30% annualized — a figure we refer to as the YieldBoost.
Below is a chart showcasing the trailing twelve-month trading history for Klaviyo Inc, with the $22.50 strike highlighted in green:
On the calls side of the options chain, the call contract at the $25.00 strike price has a current bid of $1.95. If an investor buys shares of KVYO at the current price of $23.73 and sells-to-open this call contract as a “covered call,” they commit to selling the stock at $25.00. Including the premium collected, this strategy could yield a total return of 13.57% if the stock is called away by the December 19th expiration (before broker commissions). However, significant upside potential could be missed if KVYO shares appreciate substantially, making it essential to analyze both the trailing twelve-month trading history and the company’s fundamentals. Below is a chart illustrating KVYO’s trading history, with the $25.00 strike highlighted in red:
The $25.00 strike represents an approximate 5% premium to the current trading price, indicating it is out-of-the-money by that percentage. There is also a chance that the covered call contract could expire worthless, allowing the investor to retain both their shares and the premium collected. Current analytical data suggests a 50% probability of this happening. Stock Options Channel will track these odds over time, publishing a chart of these metrics on our website under the contract detail page for this contract. If the covered call contract expires worthless, the premium would represent an 8.22% additional return for the investor, or 47.58% annualized, which we also refer to as the YieldBoost.
The implied volatility for the put contract is currently at 71%, while the call contract has an implied volatility of 69%. In contrast, we calculate the actual trailing twelve-month volatility (based on the last 250 trading days and today’s price of $23.73) to be 56%. For more ideas on put and call options contracts worth exploring, visit StockOptionsChannel.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
