Today, the price is down to $1.23, so it's been a very successful short-put play. Investors should either let it expire worthless, or roll it over (i.e., “Buy to Close”) and do a new short-put play.

For example, the April 17, 2026, put option at the $370.00 strike price is $5.00, and the $380.00 premium is $8.00, i.e., distances between 4% and 6% away (i.e., below) today's price:

That means an investor who enters an order to “Sell to Open” these put contracts will make a yield of between 1.43% (i.e., $5.00/$350.00) and 2.10% (i.e., $8.00/$380.00). That works out to an average yield of 1.765% (i.e., for 2 put contracts shorted this way), at an average out-of-the-money (OTM) distance of 5.39% lower.

Similarly, buying in-the-money (ITM) calls in longer-dated periods has worked out.

Buying Long-Dated ITM Calls

On Feb. 17, I recommended buying in-the-money calls at $350.00 expiring Sept. 18, and using short-put premiums to help pay for that investment.

At the time, the call price was $51.10. Today, that premium has risen to $68.40, a 33.9% gain over the last month. That significantly outperformed the 6% gain in DPZ stock over the same period (i.e., $397/$374.48-1).

So, doing this again might make sense for less risk-averse investors. For example, the 12/18/26 expiry period (280 days to expiry or 9 months away) call option for the $380 call has a midpoint premium of $56.45.

The idea here is that if an investor can continue to collect between $5.00 and $8.00 each month for 9 months (i.e., $6.50 x 9 = $58.50), the cost of the call option can more or less be covered:

  $58.50 cumulative put income for 9 months vs. $56.45 call option cost

Obviously, there is no guarantee that an investor can continue to collect these put premiums. But, the idea is that much of the call option cost for this in-the-money call purchase (which has some downside protection) can be paid for by cumulative short-put play income.

As a result, this is a leveraged way to play the upside in DPZ stock.

The bottom line is DPZ stock looks very cheap here, and these two plays are worth considering by value investors.

On the date of publication, Mark R. Hake, CFA did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com