Uncovering Potential Opportunities with AY Options
The options market for Atlantica Sustainable Infrastructure plc (AY) has seen new activity this week with the introduction of contracts expiring on June 21st. Delving into the AY options chain, one put and one call contract have piqued the interest of investors.
At a strike price of $17.50, the put contract currently has a bid of 70 cents. By selling-to-open this put contract, investors commit to buying the stock at $17.50 while pocketing the premium, effectively lowering the cost basis to $16.80. This presents a compelling proposition for those eyeing AY shares at a cost below the current market value of $18.41 per share.
Representing a roughly 5% discount to the current stock price, the $17.50 strike resides out-of-the-money, indicating a 63% likelihood of the put contract expiring without value. This offers a 4.00% return on cash commitment or an annualized 23.17% return, deemed the YieldBoost by Stock Options Channel.
Examining Historical Trading Data
A visual representation of AY’s twelve-month trading history pinpoints the $17.50 strike in green, showcasing its positioning relative to past performance.
On the calls side, the $20.00 strike call contract boasts a 30-cent bid. Buying AY shares at $18.41 and executing a covered call at $20.00 involves committing to sell at the latter price. This strategy could yield a 10.27% total return if shares get called away at expiration, factoring in the collected premium.
The $20.00 strike corresponds to a 9% premium to the current stock price, with a 74% probability of the covered call expiring worthless. In such an event, investors retain their shares and the premium, providing a 1.63% additional return or a 9.44% annualized return, termed the YieldBoost.
Volatility Analysis
Implied volatility for put and call contracts hovers at 37% and 32%, respectively. Actual trailing twelve-month volatility, considering 251 trading days and today’s price of $18.41, stands at 30%. For further insights into put and call options, investors can explore StockOptionsChannel.com.
