Exploring Put and Call Options for NFLX
This week, new options have emerged for investors eyeing Netflix Inc (NFLX) with an expiration date set for May 31st. Traders using the YieldBoost formula at Stock Options Channel have singled out a put and a call contract that stand out amidst the plethora of options.
The Put Option Perspective
One intriguing put contract stands out at the $625.00 strike price with a current bid of $33.75. Selling-to-open this put contract commits the investor to buy the stock at $625.00 but also allows them to collect the premium, offsetting the cost basis of the shares to $591.25. For potential buyers of NFLX shares, this could present a compelling alternative to the current market price of $628.27 per share.
The Call Option Angle
On the calls side, the call contract at the $635.00 strike price bears a bid of $35.40. Investors who purchase NFLX shares at the current price of $628.27 and then sell-to-open this call contract as a “covered call” obligate themselves to sell the shares at $635.00. With a total potential return of 6.71% at the May 31st expiration, excluding dividends, this strategy merits consideration.
Analyzing Odds and Historical Performance
Both the put and call options present probabilities of expiring worthless, currently at 56% for the put and 48% for the call. These odds, along with historical trading patterns tracked by Stock Options Channel, offer valuable insight into potential investment outcomes.
Implications of Implied Volatility
The implied volatility for the put contract stands at 42%, whereas the call contract registers 41%. In contrast, the actual trailing twelve-month volatility, factoring in the past 251 trading days and today’s price of $628.27, stands at 34%. These metrics provide a holistic view of the options landscape for NFLX investors.
Strategic Insights and YieldBoost
By assessing the possibilities presented by these options contracts, investors can make informed decisions to optimize their portfolios. Stock Options Channel’s tracking of odds, published charts, and meticulous analysis further enhance the understanding of potential returns and risks associated with options trading.