Interesting F Put And Call Options For May 17th

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1.1.1 F’s Trailing Twelve Month Trading History

1.2.1 Trailing Twelve Month Trading History for Ford Motor Co.

1.2.1.1 For additional investment opportunities:

New Options for May 17th Expiration

Today, new options for the May 17th expiration began trading for Ford Motor Co. (Symbol: F). With 128 days until expiration, these contracts present a potential opportunity for sellers of puts or calls to receive a higher premium compared to contracts with a closer expiration.

Our YieldBoost formula at Stock Options Channel has analyzed the F options chain for the new May 17th contracts, identifying one put and one call contract of particular interest.

Showcasing the Put Contract

The put contract at the $11.00 strike price has a current bid of 58 cents. Selling-to-open that put contract commits to purchasing the stock at $11.00, but also collects the premium, reducing the cost basis of the shares to $10.42 (before broker commissions). For an investor interested in purchasing F shares, this could represent an appealing alternative to the current trading price of $11.78/share.

As the $11.00 strike represents an approximate 7% discount to the current trading price, there is a 99% chance that the put contract could expire worthless. The premium would represent a 5.27% return on the cash commitment, or 15.04% annualized — what we term as the “YieldBoost.” Stock Options Channel will continue to track these odds over time.

F’s Trailing Twelve Month Trading History

Below is a chart displaying the trailing twelve-month trading history for Ford Motor Co., highlighting where the $11.00 strike is located relative to that history.

Assessing the Call Contract

The call contract at the $13.00 strike price currently has a bid of 40 cents. Purchasing shares of F stock at the current price level of $11.78/share and then selling-to-open that call contract as a “covered call” commits to selling the stock at $13.00. The call seller would also collect the premium, potentially driving a total return of 13.75% if the stock gets called away at the May 17th expiration (before broker commissions).

The $13.00 strike represents an approximate 10% premium to the current trading price, with a 99% chance that the covered call contract could expire worthless. In that case, the investor would keep both their shares of stock and the collected premium. This premium would represent a 3.40% boost of extra return to the investor, or 9.69% annualized, termed as the “YieldBoost.”