Exploring New Options
New options have become available for Ford Motor Co. (Symbol: F) with the July 19th expiration, presenting a potential opportunity for sellers of puts or calls to achieve a higher premium due to the time value with 175 days until expiration. This allows for a potential alternative to the current stock price of F, offering an attractive discount with a strike price at $10.00.
Put Contract Potential
The put contract at the $10.00 strike price currently has a bid of 42 cents. Selling-to-open the put contract commits to purchasing the stock at $10.00 and collecting the premium, effectively lowering the cost basis of the shares to $9.58. With an approximate 13% discount to the current trading price of the stock, there is also the possibility that the put contract would expire worthless, representing a 4.20% return on the cash commitment.
Trailing Twelve Month Trading History
Examining the trailing twelve month trading history for Ford Motor Co. highlights the advantageous position of the $10.00 strike relative to that history.
Call Contract Potential
On the calls side of the option chain, the call contract at the $12.00 strike price has a current bid of 45 cents. Selling-to-open that call contract as a “covered call” at a current price level of $11.45/share would commit to selling the stock at $12.00, offering a total return of 8.73%. However, the $12.00 strike represents an approximate 5% premium to the current trading price of the stock, providing the possibility that the covered call contract would expire worthless, resulting in a 3.93% boost of extra return to the investor.
Trailing Twelve Month Trading History Analysis
Studying the business fundamentals and the trailing twelve month trading history for Ford Motor Co. emphasizes the potential of the $12.00 strike in red.
Volatility and Options Contract Ideas
The actual trailing twelve month volatility for Ford Motor Co. is calculated to be 35%. For more put and call options contract ideas worth exploring, visit StockOptionsChannel.com.
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