Opportunities Unveiled in 2025 for AMZN Investors
As Amazon.com Inc’s (Symbol: AMZN) options for February 2025 hit the market today, a new realm of possibilities open up for investors. With 213 days until expiration, the allure of time value adds spice to the mix. These fresh contracts provide sellers of puts or calls the potential to fetch a richer premium compared to options with a closer expiration date.
Unraveling the Options Tapestry
The $185.00 strike put contract beckons with a bid of $14.20. Selling-to-open this contract signifies readiness to acquire the stock at $185.00 while pocketing the premium, setting the cost basis at $170.80 per share (prior to brokerage fees). For those eyeing an AMZN purchase, this could be an appealing divergence from the present $188.79/share valuation.
Putting Things into Perspective
The $185.00 strike stands at a roughly 2% markdown to the current trading price (making it out-of-the-money by that percentage), thus harboring the likelihood of worthless expiration. Statistical data, including Greeks and implied Greeks, foreshadow a 62% chance of such an outcome. Stock Options Channel will stay vigilant, monitoring these probabilities over time.
The 7.68% return on cash commitment or a 13.15% annualized yield, earned if the contract expires futile, showcases the potential RoI, dubbed the YieldBoost.
Painting the Past for a Clearer Future
A feather on the trail of Amazon.com Inc’s bygone year of trading, the chart below delineates where the $185.00 strike huddles amid this historical backdrop:
Segueing to the calls front, the $200.00 strike call contract unveils a $15.50 bid. Initiating a “covered call” post purchasing AMZN shares at the current $188.79/share asks one to commit to selling at $200.00. Envisioning the call seller’s premium collection driving a 14.15% yield (sans dividends) if the stock’s called away at the February 2025 expiry (pre-brokerage charges), this move hinges on a delicate balance of profits and prospects.
The Game of Probabilities
The $200.00 strike mirrors a near 6% premium above the current stock price, presenting a similar risk of expiring worthless. Current statistical analyses suggest a 50% probability of this eventuality. Stock Options Channel will meticulously track these odds, offering investors timely insights.
Should the call contract go bust, the premium augments the investor’s returns by 8.21%, or 14.07% annually, christened as the YieldBoost.
Bridging the Implied and Actual
With the put contract showing an implied volatility of 33% and the call one at 32%, juxtaposed against the actual trailing twelve-month volatility of 28%, the plot thickens. For a treasure trove of engaging put and call options strategies, feel free to swing by StockOptionsChannel.com.