The Smart Way to Own BKNG: Collect 11% Before You Even Buy
At about $177.25 a share, Booking (BKNG) is trading about 23% below its 52W high.
Do you think BKNG stock is a good long-term bet at current levels? What about at a 30% discount at about $124 per share? If you think that is a steal, and have some cash ready to go, here is a trade.
11% annualized yield at 30% margin of safety, by selling Put Options.
- Sell a long-dated Put option expiring 3/19/2027, with a strike price of $124
- Collect roughly $796 in premium per contract (each contract represents 100 shares)
- That’s about 6.9% annualized yield on the $12,400 you’re setting aside for the possibility of buying the stock
- This cash parked in a savings or money market account will earn an extra 4.0%, taking total yield to 10.9%
- And you give yourself a chance to buy BKNG stock at deep discounted price of $124
However, this is not the only stock strategy in town. Trefis High Quality Portfolio is a sophisticated framework designed to reduce stock-specific risk while giving upside exposure.
- Five-Year Tally: Booking Stock Delivers $33 Bil Gain
- Why Booking Holdings’ Recent Selloff May Be Overdone
- BKNG Looks Smarter Buy Than Airbnb Stock
- Earn 9.8% Today or Buy BKNG 30% Cheaper – It’s a Win-Win
- Pay Less, Gain More: BKNG Tops Airbnb Stock
- Pay Less, Gain More: BKNG, RCL Top Hyatt Hotels Stock
Possible Trade Outcomes: You Win Either Way
| Stock Price Outcome | What It Means For You |
|---|---|
| BKNG stays above $124 | You keep the full $796 premium – 6.4% extra income over the next 340 days on cash that might otherwise earn you 4.0% or less. You never buy the stock and simply walk away with the cash. |
| BKNG closes below $124 | You’ll be obligated to buy 100 shares at $124. But thanks to $796 premium, your effective cost basis is just $116.04 per share – a roughly 35% discount from current level. |
But to hold this trade with conviction, you want to see long term upside in the stock. Because if it comes to it, you want to be excited about buying the stock cheap.
Check out Buy or Sell BKNG Stock and Booking Investment Highlights
If you are not comfortable with options or stock-specific trades, Portfolios are the way to go as they can protect and grow wealth even better.
Portfolios Over Individual Stock Picks
Stocks can jump or crash, but long-term success comes from staying invested. The right portfolio helps you ride gains and cushion single stock drops.
Why settle for average market returns? The Trefis High Quality (HQ) Portfolio invests in a diverse group of 30 stocks that have collectively delivered stronger upside with reduced volatility compared to the broader indices. Discover the methodology behind these smoother, higher returns by checking the HQ Portfolio performance data.