The chart above, and the stock's historical volatility, can be a helpful guide in combination with fundamental analysis to judge whether selling the August put at the $9 strike for the 35.1% annualized rate of return represents good reward for the risks. We calculate the trailing twelve month volatility for Bridgepoint Education, Inc. (considering the last 248 trading day closing values as well as today's price of $12.17) to be 64%. For other put options contract ideas at the various different available expirations, visit the BPI Stock Options page of StockOptionsChannel.com.
In mid-afternoon trading on Monday, the put volume among S&P 500 components was 1.61M contracts, with call volume at 1.61M, for a put:call ratio of 0.70 so far for the day, which is above normal compared to the long-term median put:call ratio of .65. In other words, if we look at the number of call buyers and then use the long-term median to project the number of put buyers we'd expect to see, we're actually seeing more put buyers than expected out there in options trading so far today.