Regeneron is a biopharmaceutical company focused on treatments for eye diseases, cancer, dermatitis,and rheumatoid arthritis. The average target price of 25 analysts covering Regeneron is $628.36 (+27.0% above the current stock price). Eighteen analysts rate it as a 'Strong Buy' or 'Buy', seven rate it a 'Hold', and none rate it as 'Underperform' or 'Sell'. Given Regeneron's potential, the Covered Calls Advisor believes it represents a very good value at its current price and at its current relatively modest P/E ratio of 14.2 and only 10.6 based on this year's estimated earnings.
The 25.1 Implied Volatility for the Put option was attractive to the Covered Calls Advisor since it is well above the current S&P 500 Volatility Index (VIX) of 18.5. Important to the Covered Calls Advisor, there is no earnings report prior to the June 18th, 2021 options expiration date.
As detailed below for this Regeneron 100% Cash-Secured Put position, there is potential for a +1.4% absolute return in 25 days (equivalent to a +21.0% annualized return-on-investment).
Regeneron Pharmaceuticals Inc. (REGN) -- New 100% Cash-Secured Put Position
The transaction today was as follows:
05/25/2021 Sold 1 Regeneron June 18th, 2021 $480.00 100% Cash-Secured Put option @ $6.80 per share.
The Covered Calls Advisor does not use margin, so the detailed
information on this position and the potential result detailed below
reflect that this position was established using 100% cash
securitization for the one Put option sold.
A possible overall performance result (including commissions) would be as follows:
100% Cash-Secured Put Cost Basis: $47,320.67
= ($480.00 - $6.80) * 100 shares + $.67 commission
Net Profit:
(a) Options Income: +$679.33
= ($6.80 * 100 shares) - $.67 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If REGN stock is above $480.00 strike price at the June 18th expiration): +$0.00
= ($480.00 - $480.00) * 100 shares
Total Net Profit (If Regeneron stock price is above $480.00 strike price at options expiration): +$679.33
= (+$679.33 option income +$0.00 dividend income +$0.00 capital appreciation)
Absolute Return (If Regeneron is above $480.00 strike price at the June 18th, 2021 options expiration) : +1.4%
= +$679.33/$47,320.67
Equivalent Annualized Return: +21.0%
= (+$679.33/$47,320.67)*(365/25 days)
