Insightful Analysis on AMZN Options Trading

Exploring AMZN Options Opportunities

Today marks the commencement of trading for Amazon.com Inc (Symbol: AMZN) options expiring on September 27th. With a fresh wave of opportunities in play, investors are faced with intriguing possibilities to navigate the financial seas.

Diving into Put Options

A put contract at the $155.00 strike price beckons, boasting a bid of $3.40. By opting to sell-to-open this put contract, investors embrace the chance to secure the stock at $155.00 while benefiting from the premium, setting the stage for a cost basis of $151.60 (pre-broker commissions).

Trading at a 6% discount to the stock’s current market value, the $155.00 strike flaunts potential, encapsulating a 73% probability of expiring without value. This translates to a 2.19% return on cash commitment or a tantalizing 16.01% annualized yield, aptly termed the YieldBoost.

Unveiling Call Options

On the calls front, the $170.00 strike emerges with a bid of $5.25. A strategic move entails buying AMZN shares at $164.69 and selling-to-open the call contract, committing to sell shares at $170.00. A covered call transaction seeds a total return of 6.41% if stock call-away plays out at the September 27th culmination, excluding dividends.

Possibilities abound, with a 57% chance of the covered call expiring redundant. In such a scenario, investors retain both stock shares and the premium collected, echoing a 3.19% extra return or a staggering 23.27% annualized gain, a vibrant manifestation of the YieldBoost.

The Tale of Volatility

Implied volatility stands at 34% for put options and 31% for call options. In contrast, actual trailing twelve-month volatility clocks in at 28%, considering the past 251 trading days and the current stock price of $164.69.

Traders thirsting for more options ideas are encouraged to peruse through the offerings at StockOptionsChannel.com, continuing the quest for fruitful financial endeavors.