So, there's this company called ResMed that makes devices to help people who have trouble breathing while they sleep. People are paying attention to the options, which are like bets on how much the stock will go up or down in price. They look at the different prices where these bets are being made and see if there's anything unusual going on. The article also talks about ResMed's business and what it's doing to grow. It mentions that the company is doing well right now, but the stock might be a little too expensive. People who trade options need to pay attention to many things to make good decisions. Read from source...
- The article lacks a clear and concise introduction that explains the purpose and scope of the analysis. It jumps straight into the data visualization without providing any context or background information on ResMed and its options trading activity.
1. Buy ResMed (RMD) shares at the current market price of $189.16 with a stop-loss order set at $175.0, which is 8% below the entry point. This would limit the downside risk to 12%. The target profit level should be $200, which is 5% above the entry point and represents an approximate 4% annualized return.
2. Sell ResMed (RMD) shares at a strike price of $220.0 with a call option that has a contract size of 100 shares per trade and an expiration date in six months. This would generate a net credit of $8.56 per share, which is equivalent to a 4% annualized return. The risk profile of this strategy is limited to the premium received, which is $3.92 per contract, or approximately 17%.
3. Buy ResMed (RMD) shares at a strike price of $180.0 with a put option that has a contract size of 100 shares per trade and an expiration date in six months. This would require a net debit of $5.64 per share, which is equivalent to a 3% annualized return. The risk profile of this strategy is unlimited, as the maximum loss occurs at expiration if the underlying stock price is above the strike price.