Trading for new options in Ford Motor Co. (Symbol: F) commenced today, for the March 1st expiration. Our YieldBoost formula at Stock Options Channel identified a put and a call contract with unique potential.
Favorable Put Contract for Investors
At the $11.50 strike price, the put contract is currently bid at 50 cents. Should an investor opt to sell-to-open this put contract, they commit to acquiring the stock at $11.50, while also collecting the premium, therefore setting the cost basis of the shares at $11.00 (before broker commissions). This presents an enticing alternative to purchasing shares at $11.64/share today.
The current 1% discount to the stock’s trading price (i.e., it is out-of-the-money by that percentage) also suggests the possibility of the put contract expiring worthless. The current odds of this occurrence are 56%, with Stock Options Channel set to monitor changes over time. If the contract expires worthless, the premium would represent a 4.35% return on the cash commitment or 31.74% annualized, known as the “YieldBoost.”
Insights from Historical Data
An overview of the trailing twelve-month trading history for Ford Motor Co., showcased a chart depicting the positioning of the $11.50 strike concerning this history.
Promising Call Contract Opportunity
The call contract at the $13.00 strike price currently has a bid of 11 cents. By purchasing F stock at the current price level of $11.64/share, and then engaging in a “covered call” by selling-to-open this call contract, the investor commits to selling the stock at $13.00. The call seller also benefits from collecting the premium, potentially resulting in a total return of 12.63% should the stock get called away at the March 1st expiration (before broker commissions).
The $13.00 strike represents a roughly 12% premium to the current trading price of the stock, suggesting the possibility of the covered call contract expiring worthless. The current odds of this occurrence are 99%, with Stock Options Channel set to monitor changes over time. If the contract expires worthless, the premium would represent a 0.95% boost of extra return to the investor, or 6.90% annualized, referred to as the “YieldBoost.”
Diving into Analytical Data
The implied volatility in the put contract example above is 39%. Comparatively, the actual trailing twelve-month volatility is calculated to be 36%. For more put and call options contract ideas worth exploring, visit StockOptionsChannel.com.
Additionally, detailed insights regarding the implied and actual volatility provide a scope for investors to make informed decisions.