Exploring Put and Call Options

Options trading for Ford Motor Co. (Symbol: F) commenced for the March 1st expiration, garnering attention from investors. Stock Options Channel’s YieldBoost formula identified a put and call contract of interest.

Put Option Analysis

A put contract at the $11.50 strike price presents a bid of 50 cents. By selling-to-open the put contract, an investor can secure the stock at $11.50, while also pocketing the premium, effectively setting the cost basis at $11.00. This represents a discounted purchase alternative, considering the current trading price. The 1% discrepancy deems the put contract as “out-of-the-money,” signifying a 56% likelihood of expiration without value. If the contract expires worthless, the premium implies a 4.35% return on the cash commitment, or 31.74% annualized (YieldBoost).

Assessing Call Options

On the calls side, a call contract at the $13.00 strike price is listed with a bid of 11 cents. By engaging in a “covered call,” an investor can commit to selling the stock at $13.00, thereby securing a 12.63% total return if the stock gets called away at expiration. The 12% premium indicates the contract’s out-of-the-money status, suggesting a 99% chance of expiring without value. Should the contract expire worthless, the premium yields a 0.95% boost in extra return, or 6.90% annualized (YieldBoost).

Volatility Insights

The implied volatility for the put contract stands at 39%, while the trailing twelve-month volatility is calculated at 36%. These figures offer essential knowledge for investors pondering options. For more insights into put and call options, visit StockOptionsChannel.com.