Today marks the genesis of new opportunities for investors eyeing Ford Motor Co. (Symbol: F) as options for the April 26th expiration cycle are up for grabs. Combing through the F options chain, our YieldBoost formula has spotlighted intriguing moves within this realm.
Exploring Put Options
Delving into the put options domain, the $11.50 strike price beckons with a bid of 20 cents. Opting to sell-to-open this put contract involves committing to buying the stock at $11.50, offset by collecting the premium and setting the cost basis of the shares at $11.30. A tempting proposition for potential F shareholders, offering an alluring contrast to the current $12.41/share price point. The $11.50 strike presents a ~7% markdown from the prevailing trading price, teetering as an out-of-the-money prospect. There remains a 75% likelihood that the put contract could expire worthless. The analytical landscape, enveloping greeks and implied greeks, hints at these odds, paving the way for nuanced observation over time.
The Implied YieldBoost
If the contract concludes in futility, the premium enhances cash commitment by 1.74%, translating to a noteworthy 12.71% annualized return. This unveiling of potential gains, aptly termed YieldBoost, accentuates the allure of delving into the realm of F options trading.
Embracing Call Options
Shifting gears to the calls spectrum, the $13.00 strike rate unfolds with a 33-cent bid, ushering a scenario where buyers rendezvous with the current share price of $12.41, subsequently venturing into a ‘covered call’ mantra. By committing to sell the shares at $13.00 and pocketing the premium, an enticing return of 7.41% emerges if the stock opts for the call-away route at the April 26th expiration. Yet, the red flag against this appealing backdrop is the potential forfeiture of substantial upsides if F shares catapult in value.
Weighing the Covered Call Odds
The $13.00 strike’s ~5% premium above current trading levels poses the risk of expiration without fruition, clinging to a 62% probability. Monitoring these odds, coupled with delving into the historical intricacies of the option contract, accentuates savvy decision-making in the options realm. A potential worthless encounter could culminate in a 2.66% supplementary return for shareholders, amounting to a stellar 19.43% annualized boost via the YieldBoost mechanism.
A Glimpse into Volatility
Implied volatility unveils itself at 35% in the put contract scenario and 34% within the call contract narrative. Meanwhile, the tangible trailing twelve-month volatility surfaces at a congruent 34%, bridging the realms of speculation and reality. Ensuring a holistic outlook on potential options trajectories, buoyed by empirical and predictive insights.
For connoisseurs seeking further avenues within the put and call options diaspora, a visit to StockOptionsChannel.com uncovers a gamut of possibilities waiting to be unwrapped.