Today, investors were presented with riveting new options tied to Ford Motor Co. (Symbol: F) expiring on April 12th. Our discerning analysis at Stock Options Channel uncovered one put and one call contract that demanded attention.
A Puts Perspective
Delve into the put contract at the $12.00 strike price, where a bid of 24 cents lingers. Enterprising investors could opt to sell-to-open this put contract, obliging them to procure the stock at $12.00 while reaping the premium. This move could potentially reduce the cost basis of the shares to $11.76 (excluding broker commissions), a tantalizing alternative to the current $12.41/share rate.
The $12.00 strike reflects a 3% markdown from the prevailing trading price, rendering it out-of-the-money by that margin. Statistical acumen indicates a staggering 99% odds of the put contract expiring worthless, promising a 2.00% return on the cash commitment or a 16.99% annualized YieldBoost.
Calls Exploration
Shift focus to the calls side, where the call contract at the $12.50 strike boasts a bid of 46 cents. By securing shares of F stock at $12.41/share and executing a “covered call,” investors bind themselves to vend the stock at $12.50. The resultant total return (minus dividends) could reach 4.43% if the stock is called away by the April 12th deadline (prior to broker commissions).
The $12.50 strike signifies a 1% premium relative to the current trading price, earmarking it as out-of-the-money by that degree. Data insights outline a 99% likelihood of the covered call contract expiring worthless, leaving investors with their stock holdings and the collected premium. This could translate to a 3.71% supplementary return or a 31.49% annualized YieldBoost.
Noteworthy Statistics
Immersing further into data, the trailing twelve month volatility is tagged at 34%, factoring today’s price of $12.41 alongside the last 251 trading days. For a plethora of engaging put and call options concepts, do visit StockOptionsChannel.com.