Exploring New Avenues
Investors in Tesla Inc (Symbol: TSLA) witnessed the initiation of trading in new options this week, specifically for the May 3rd expiration date.
Our YieldBoost formula at Stock Options Channel has meticulously sifted through the TSLA options chain, singling out one put and one call contract for special attention.
Put Contracts: A Calculated Move
As an illustration, the put contract at the $160.00 strike price is currently bid at $7.45. By venturing into this put contract and selling-to-open, investors are poised to acquire the stock at $160.00, alongside gathering the premium. This action would establish a cost basis of $152.55 for the shares, a notable discount compared to the present market rate of $169.96 per share.
With the $160.00 strike revealing a substantial 6% markdown from the prevailing trading price, there lies the prospect of the put contract expiring without value. Statistical insights suggest a 66% likelihood of this outcome. Stock Options Channel will diligently record these probabilities over time, delineating them on our platform.
Call Contracts: Strategic Ventures
On the flip side, the call contract at the $175.00 strike price has a current bid of $9.75. Engaging in a covered call strategy by purchasing TSLA shares at $169.96 and then selling-to-open the $175.00 call contract entails a commitment to sell the shares at $175.00. This approach could yield an 8.70% total return if the stock gets assigned at the May 3rd expiration.
The $175.00 strike carries an approximate 3% premium, underscoring the possibility of the covered call contract expiring barren. The analytics reveal a 53% chance of this occurrence. Stock Options Channel will vigilantly monitor and present these shifting odds.
Navigating Volatility
Implicit volatility stands at 56% for put contracts and 54% for call contracts. In contrast, actual trailing twelve-month volatility hovers around 48%. These insights provide a comprehensive view for investors to make informed decisions.
For additional compelling put and call options contract ideas, do explore StockOptionsChannel.com for further insights and analyses.