We’re using the U.S.-listed ADR version of Novo Nordisk (ticker: NVO) because options are not available on the Denmark-listed shares.

This retracement doesn’t necessarily mean the story is over—it may simply mean the valuation got ahead of itself. And if you’re a long-term investor who believes in the future of GLP-1 treatments, the current price may feel like an opportunity.

But instead of buying shares outright at  USD 69, there’s a more strategic approach.

Important note: The strategies and examples described are purely for educational purposes. They assist in shaping your thought process and should not be replicated or implemented without careful consideration. Every investor must conduct their own due diligence, considering their financial situation, risk tolerance, and investment objectives before making decisions. Remember, investing in the stock market carries risks, so make informed decisions.

What’s a cash-secured put, in plain English?

Imagine you’re willing to buy 100 Novo shares—but only if the price drops a little more, say to USD 64. Now imagine someone pays you  USD 170 today for that possibility. That’s a cash-secured put: you’re selling someone else the right to sell you shares at a set price, and in return, you’re paid a premium upfront.

To do this safely, you set aside the full amount needed to buy the shares (USD 6 400 in this case), so you’re covered if it happens. It’s called “cash-secured” because your obligation is fully backed by cash.

This strategy is particularly suitable for conservative investors. You either:

• Earn income if the shares stay above your target price, or
• Buy the stock you already wanted, but at a discount.

Let’s look at a real example.

The trade: selling the USD 64 put expiring August 8, 2025

As of today, with Novo Nordisk trading near USD 69, the August 8 put option with a USD 64 strike is trading around USD 1.70 per share. That means you can collect USD 170 in premium (since each contract represents 100 shares) for agreeing to buy the stock at USD 64 if it drops.

To execute this, you'd sell one put contract and set aside USD 6 400 in cash. That’s the maximum you’d need to buy the shares if assigned.

Now here’s the part that many investors love: if the share price stays above USD 64 through August 8, the put expires worthless—and you keep the USD 170 premium. On a cash commitment of USD 6 400, that’s a 2.7% return in just 32 days.

On an annualised basis, that works out to roughly 29%, assuming you could repeat this kind of trade every month (which, of course, isn’t guaranteed).

This “get paid to wait” yield is the real power of cash-secured puts—especially when premiums are elevated, as they are now due to increased short-term volatility in the stock.

What can happen at expiration?

There are two possible outcomes—both acceptable, depending on your investment goals.

Scenario 1: Novo stays above USD 64
Your put expires worthless. You keep the $170 premium as pure income. Your €6 400 in cash was never used to buy shares, and you can now consider repeating the strategy for another month.

Scenario 2: Novo falls below USD 64
You’re assigned 100 shares at USD 64, which you already agreed to. But thanks to the USD 1.70 premium you received, your effective purchase price is USD 62.30—a further 10% discount from where the stock was trading just a few weeks ago. From here, you could simply hold the shares or start generating income with a covered call.

Risks to keep in mind

No investment strategy is without risk—even one that sounds this conservative.

The biggest risk here is that Novo drops well below USD 64 before expiration. If the stock falls to USD 55, for instance, you’d still be obligated to buy it at USD 64, meaning you'd have a paper loss on your new position. However, because you were paid USD 1.70 upfront, your break-even point is actually USD 62.30.

Another factor to be aware of: Novo Nordisk trades as an ADR on the NYSE (ticker: NVO), but its home listing is in Denmark. That means movements in the Danish krone (DKK) versus the US dollar can also influence the price. And like all pharma stocks, headlines about clinical trials, competition (such as Eli Lilly’s Zepbound), or regulatory changes can move the share price quickly.

Final thoughts

If you're a long-term investor looking to add Novo Nordisk to your portfolio, selling a cash-secured put at $64 offers a compelling way to do so—either collecting a ~2.7% yield in one month or buying the stock nearly 10% below the current price.

It’s a calm, measured approach in a market that’s been anything but.

Just remember: while cash-secured puts are straightforward, they still require a clear plan. Know how much capital you’re willing to commit, stick to high-quality names you’re happy to own, and never forget that your real return depends on both outcome and discipline.