New options tied to Spotify Technology SA’s December 2028 expiration became available, giving long-dated hedgers and income-focused traders fresh contracts to evaluate. According to Stock Options Channel, the newly listed chain includes a put and a call at specific strikes that the firm says could appeal to sellers of downside protection or covered call strategies, supported by the contracts’ time value and implied volatility of roughly 46%.
Key takeaways
- Put strategy: Stock Options Channel flagged a December 2028 $550 put with a bid around $116.95, implying a potential “put sell” cost basis near $433.05 before commissions.
- Call strategy: The firm also highlighted a December 2028 $700 call with a bid near $119.25 as a potential covered call target for investors willing to sell shares at that level.
- Catalysts: The opportunity stems from the release of long-dated contracts and their pricing—particularly time value and implied volatility—rather than a specific company event.
- Key implication: Both examples carry meaningful probabilities of expiring worthless, meaning premium collection is possible, but investors must accept defined outcomes (share purchase at the put strike or share sale at the call strike).
What drove the update in Spotify options
Options traders often focus on how much time remains until expiration because longer-dated contracts typically offer more time value. With roughly 833 days until the December 2028 expiry, Stock Options Channel says the newly available SPOT contracts can present a potential source of higher option premium relative to nearer expirations.
The firm’s “YieldBoost” framework then screens the options chain and identifies particular put and call contracts it considers especially interesting, emphasizing both implied volatility inputs and the moneyness of each strike versus the stock’s then-current reference level of $553.85.
Put contract focus: selling downside protection
On the put side, Stock Options Channel pointed to a December 2028 put at the $550 strike, quoting a current bid of about $116.95. If an investor sells the put short (“sell-to-open”), the trade commits them to buy Spotify shares at $550 if the option is exercised, while the seller also collects the premium upfront. Stock Options Channel calculates that the collected premium would effectively reduce the share purchase price to roughly $433.05 before broker commissions.
Because the $550 strike is about 1% below the reference stock price of $553.85, the option is positioned out of the money. The firm’s option analytics (including greeks and implied greeks) suggest there is a 68% chance the put could expire worthless, which would allow the seller to keep the premium.
Under that “expire worthless” scenario, Stock Options Channel estimates the premium collected would represent a 21.26% return on the cash commitment, or about 9.32% annualized, using its YieldBoost measure. The firm says it will track how those odds evolve and publish the related probability chart on the contract’s detail page.
Call contract focus: covered calls above the market
On the call side, Stock Options Channel highlighted a December 2028 call at the $700 strike, quoting a current bid around $119.25. In a covered call structure, an investor would hold Spotify shares and sell (“sell-to-open”) the call, effectively agreeing to sell the shares at $700 if the option is exercised by expiration.
In that framework, the premium collected would be added to the return profile. Stock Options Channel estimates a total return of about 47.92% if shares are called away at December 2028 expiry (excluding dividends, if any), again before broker commissions. However, the firm notes the trade caps upside because the strike would be reached only if the stock appreciates sufficiently.
The $700 strike is positioned roughly 26% above the reference price of $553.85, placing it out of the money. Based on its greeks and implied greeks, Stock Options Channel estimates a 45% probability that the covered call would expire worthless—meaning the investor keeps both the shares and the premium.
If the call expires worthless, Stock Options Channel estimates the premium would add a 21.53% boost to returns, or about 9.43% annualized, using its YieldBoost metric. As with the put example, the firm says it will continue to monitor the contract’s evolving probabilities and publish charts on its website.
Volatility inputs and what they suggest
Stock Options Channel reports that implied volatility levels embedded in both the highlighted put and call examples are approximately 46%. The firm also calculates trailing twelve-month realized volatility at about 44% using the last 252 trading day closing values alongside the reference stock price of $553.85.
The proximity of implied to realized volatility suggests the options market is pricing relatively in line with recent stock movement—an input that can matter for income strategies built around selling premium, particularly when traders assess whether option prices appear rich or cheap versus expected variance.
What investors should watch next
For investors considering these long-dated SPOT contracts, the key moving parts are not company-specific catalysts but the evolution of implied volatility, changes in the stock’s direction relative to the $550 and $700 strikes, and how the probability of expiring worthless shifts over time. Traders may also want to reassess outcomes around major market drivers that can move the stock and rates—such as upcoming macro data releases and scheduled corporate updates—as these factors can quickly alter the balance between downside protection, covered call income, and the risk of getting assigned or capping upside.
