New Options for Vodafone Group: An Attractive Opportunity for Investors
Investors looking at Vodafone Group plc (Symbol: VOD) today noted the introduction of new options set to expire on December 20th. Stock Options Channel has used its YieldBoost formula to analyze the VOD options chain for these new contracts, pinpointing a specific put contract that may catch investors’ attention.
Focus on the $9.00 Put Contract
The put contract priced at $9.00 currently has a bid of 16 cents. If an investor chooses to sell-to-open this put option, they would agree to buy Vodafone shares at $9.00. Meanwhile, they would collect the premium, resulting in a cost basis of $8.84 per share (excluding broker commissions). For anyone interested in acquiring VOD shares, this option offers a compelling alternative to the current market price of $9.73 per share.
Potential Risks and Rewards
The $9.00 strike price represents an approximately 8% discount from the stock’s current trading price, indicating it is out-of-the-money. There is also a 67% chance that this put contract could expire worthless, based on current analytical data including greeks and implied greeks. Stock Options Channel plans to monitor these odds over time, updating a chart on their website for this specific contract. Should the contract expire worthless, the premium collected would equate to a 1.78% return on the cash commitment, translating to an annualized return of 10.13% — a figure we refer to as the YieldBoost.
Understanding Volatility
In this put contract example, the implied volatility is calculated at 47%. In contrast, the actual trailing twelve-month volatility, based on the last 251 trading days along with today’s share price of $9.73, is estimated to be 26%. For more insights on put and call options worth exploring, visit StockOptionsChannel.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
