Make a 4.5% One-Month Yield Shorting Shopify Cash-Secured OTM Puts

Core Insights - Shopify, Inc. (SHOP) offers a cash-secured put option play with a one-month yield of 4.5%, providing good downside protection and an attractive expected return [1] - The stock closed at $161.14 on October 3, 2025, and is currently at a peak, suggesting new investors may consider setting a lower buy-in point by shorting out-of-the-money puts [1] Financial Analysis - A previous analysis indicated that SHOP stock could be valued at $177.58 based on strong free cash flow, which is over 20.9% higher than the price of $146.82 [3] - The current put premium is 33 cents, indicating that 92% of the previous yield of 3.09% has been realized, suggesting a rollover of the play for another month [4] - Analysts estimate Shopify's revenue to be $11.27 billion for 2025 and $13.79 billion for 2026, leading to a projected 12-month revenue of $13.16 billion [5] - With an estimated free cash flow margin of 18.5%, the projected free cash flow for the next 12 months is $2.4346 billion, which could imply a market value of $243.36 billion, representing a 16% increase over the current market cap of $209.741 billion [5] - This valuation suggests that SHOP stock is worth approximately $186.92, which is 5.3% higher than the previous price target of $177.58 [6]