Investors in Papa John’s International, Inc. (Symbol: PZZA) saw new options trading this week, with a term ending in January 2026. One of the most important data points that determine the price an option buyer is willing to pay is the time value. With 850 days until expiration, the new trading contracts thus represent a potential opportunity for sellers of put or call options to capture a higher premium than would be available for shorter-term contracts. At Stock Options Channel, our YieldBoost formula has searched up and down the PZZA options chain for the January 2026 new contracts and identified one put and one call contract of particular interest.
The put contract at the strike price of $72.50 has a current bid of $11.90. If an investor were to sell that put contract to open, he would commit to buying the stock for $72.50, but he would also collect the premium, bringing the cost basis of the stock to $60.60 (before brokerage commissions). For an investor already interested in buying shares of PZZA, this could be an attractive alternative to paying $75.58/share today.
Because the $72.50 strike represents a discount of about 4% to the stock’s current trading price (in other words, it’s out-of-the-money by that percentage), there’s also the possibility that the put contract expires worthless . Current analytical data (including the Greeks and the Implied Greeks) suggests that the current probability of this happening is 67%. Stock Options Channel will monitor these odds over time to see how they change, and publish a graph of these numbers on our website under the contract detail page for this contract. If the contract expires worthless, the premium would represent a return of 16.41% on the cash commitment, or 7.05% annually. At Stock Options Channel we call this the Yield boost.
Below is a chart showing the trading history of Papa John’s International, Inc. twelve-month history, showing in green where the $72.50 strike is relative to that history:
Turning to the call side of the options chain, the call contract with the strike price of $85.00 has a current bid of $13.70. If an investor were to buy PZZA stock at the current price level of $75.58/share, and then sell that call contract to open as a “covered call,” he is committing to sell the stock at $85.00. Considering that the call seller will also collect the premium, that would give a total return (excluding any dividends) of 30.59% if the shares are called away at the January 2026 maturity (before broker commissions). Of course, a lot of potential could be left on the table if PZZA stock really rises. Therefore, it becomes important to look at both the twelve-month trading history of Papa John’s International, Inc. to look at business fundamentals. Below is a chart showing PZZA’s twelve-month trading history with the $85.00 strike highlighted in red:
Considering that the $85.00 strike represents a roughly 12% premium to the stock’s current trading price (in other words, it’s out-of-the-money by that percentage), there’s also the possibility that the covered call contract expires worthless, in which case the investor would keep both his stock shares and the premium collected. The current analytical data (including the Greeks and the implied Greeks) suggests that the current probability of this happening is 45%. On our website under the contract detail page for this contract, Stock Options Channel will track these odds over time to see how they change and publish a graph of those numbers (the options contract’s trading history will also be charted). If the covered call contract expires worthless, the premium would mean an additional return increase of 18.13% for the investor, or 7.78% on an annual basis, which we estimate Yield boost.
The implied volatility in the put contract example is 44%, while the implied volatility in the call contract example is 34%.
Meanwhile, we calculate the true twelve-month volatility (considering the closing values of the last 251 trading days and the current price of $75.58) to be 34%. For more put and call option contract ideas worth checking out, visit StockOptionsChannel.com.
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