Decoding the Options Market Dance
When the calendar turns its page to December 6th, investors at Ford Motor Co. (Symbol: F) have an intriguing tango awaiting them in the options market. New contracts have arrived on the scene, heralding exciting prospects for those willing to step onto the dance floor.
Unveiling the Put Contract
Lurking within the options chain lies a put contract at the $11.00 strike price, beckoning with a bid of 57 cents. Should an investor choose to sell-to-open this contract, they are primed to secure the stock at $11.00 while pocketing the premium, setting a cost basis attirely swathed in $10.43 garb. For those eyeing an F shares purchase, this allure might just sway them away from the $11.13/share offering currently playing on the stage.
Deciphering the Call Contract
Venturing to the calls realm, a call contract at the $11.50 strike price presents itself with a bid of 39 cents. Buyers pondering F stock acquisition at $11.13/share can don the call seller hat by selling-to-open this contract—a move that proclaims intention to yield profits at $11.50. This intriguing duet offers a potential return of 6.83%, sans dividends, should the stock whirl away at the December 6th expiration, a scenario demanding careful consideration of F’s trading history and business bedrock.
Picturing Past and Future
Portrayed in historical greens and reds, the $11.00 and $11.50 strikes leap forth from Ford Motor Co.’s trailing twelve months trading tapestry, whispering of potential rises and falls down the options path.
Contemplating Volatility and Returns
The put contract entrances with a 43% implied volatility, while the call contract enchants with 40%. Real-world musings place the actual trailing twelve month volatility at 39%, a scene ripe for further exploration amidst shifting market winds.
Notes from the Trading Trenches
For those hungering for more options landscapes to roam, a visit to StockOptionsChannel.com may unveil more hidden treasures awaiting discovery.