Today, investors in Ford Motor Co. (Symbol: F) have the chance to explore new options for the May 17th expiration. These contracts possess intriguing potential for sellers of puts or calls due to the time value, with 128 days until expiration.
Profitable Possibilities
The $11.00 strike put contract currently holds a bid of 58 cents, offering an appealing opportunity. Should an investor sell-to-open that put contract, they would commit to purchase the stock at $11.00, while also collecting the premium – effectively establishing a cost basis of $10.42 per share.
Aligning with the stock’s current trading price of $11.78/share, selling the put contract at a 7% discount represents a possibility for the contract to expire worthless, with current odds suggesting a 99% chance of that outcome. Should the contract expire without value, the premium would deliver a 5.27% return on the cash commitment, or 15.04% annualized.
Strategic Chart Analysis
A look at Ford Motor Co.’s twelve-month trading history depicts the $11.00 strike and its relation to historical stock performance, presenting a visual representation of the potential opportunity.
Optimistic Calls
On the calls side, the $13.00 strike price call contract is currently quoted at 40 cents, offering investors an interesting pathway. By purchasing shares of F stock at the current price level of $11.78/share, and then selling-to-open the call contract as a “covered call,” investors are committing to sell the stock at $13.00, presenting the possibility of a 13.75% total return if the stock is exercised at the May 17th expiration.
With the possibility nonetheless of the covered call contract expiring worthless, the current odds indicate a 99% likelihood of that happening. If the covered call contract does indeed expire without value, the premium would offer a 3.40% additional return for the investor, or a 9.69% annualized boost, also known as the YieldBoost.
Insightful Analysis
An analysis of Ford Motor Co.’s trailing twelve-month trading history, particularly in relation to the $13.00 strike, provides significant context for investors to consider.
Key Data and Insights
Meanwhile, the actual trailing twelve-month volatility is calculated at 36%, emphasizing the potential in these options contracts. Investors seeking more put and call options contract ideas can visit StockOptionsChannel.com.
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