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Learn moreAnalysts keep hiking their stock price targets for chip-maker Marvell Technology (MRVL). As a result, two attractive plays are shorting out-of-the-money MRVL put options and put credit spreads.
MRVL closed up 1.45% on Friday, Sept. 18, at $244.25. It has risen from a recent trough price of $163.40 almost two months ago (July 29), but it's still well below a 6-month peak of $316.43 on June 4.
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I wrote about how cheap it was last month in a Sept. 1 Barchart article, "Marvell Technology Posts Lower FCF Margins, But Revenue Could Surge Next Year - Is MRVL Stock Too Cheap?"
At the time, MRVL was at $211.66, but I showed that, based on its strong free cash flow (FCF) and FCF margins, it could be worth $285.32. That is still 16.8% higher than its Friday close.
Moreover, analysts surveyed by Yahoo! Finance have hiked their price targets (PTs) to $289.04, up from $278.89 last month. Barchart's mean survey PT is now $291.25, higher than $290.94 last month.
However, AnaChart shows that the average of 28 analysts is $241.23, slightly below its current price.
The bottom line is that MRVL stock could still have some upside, albeit not as much as before.
That also makes it ideal for investors who want to buy in at a lower price and get paid while waiting. They do this by selling short out-of-the-money (OTM) cash-secured puts.
Shorting OTM Cash-Secured MRVL Puts
Last month I wrote about shorting the Oct. 2, 2026, expiry put option at the $190.00 strike price. At the time, this was 10% below the trading price. Moreover, the delta ratio was -0.2290, implying a low chance the account would be assigned to buy 100 shares at that strike price.
Short-sellers collected a $5.15 premium, so the expected short-put yield was 2.71% (i.e., $515/$19,000 collateral). Today, that put premium has dropped to just 45 cents. So, the short-seller has made most of the income and can now roll this trade over.
For example, the Oct. 30, 2026, expiry period, 39 days away, the $215 strike price put contract has a midpoint premium of $8.38. This strike has a similar delta ratio (-0.2389), and it's 12% below Friday's close (i.e., out-of-the-money).
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