New Amazon Options Present Interesting Choices for Investors

Today, Amazon.com Inc (Symbol: AMZN) launched new options that will expire in May 2025. With 176 days until expiration, these contracts may offer better premiums for option sellers compared to those set to expire sooner. Stock Options Channel has examined the AMZN options chain and identified one put and one call contract worthy of attention.

Exploring the $195 Put Contract

The put contract at the $195.00 strike price is currently bid at $10.80. Selling this contract means an investor agrees to buy the stock at $195.00, but they will also receive a premium, effectively lowering their cost basis to $184.20 (before broker fees). For those already interested in buying AMZN shares, this could be a more appealing option than purchasing at the current price of $199.65/share.

This $195.00 strike price offers about a 2% discount to AMZN’s current trading price, making it slightly out-of-the-money. There’s a 63% chance that this put will expire worthless, based on current analysis and predictive measures. If it does expire worthless, the premium obtained from the put would reflect a return of 5.54% on the cash commitment, or an annualized rate of 11.49%, a figure we refer to as YieldBoost.

Call Options at a $215 Strike Price

On the calls side, there is a contract priced at a $215.00 strike, currently with a bid of $12.00. An investor buying AMZN stock at $199.65/share could sell this call as a covered call, agreeing to sell their shares at $215.00. Collecting the premium would lead to a total return of 13.70% if the stock is called away by the May 2025 expiration (excluding dividends and broker fees). However, this strategy could limit potential gains if AMZN’s price increases significantly.

Looking at Amazon’s recent trading history, the $215.00 strike represents approximately an 8% premium to the current stock price. There’s a 55% chance that this covered call will also expire worthless, which would allow the investor to retain both their shares and the premium received. Should it expire worthless, the premium would yield an additional 6.01% return, or 12.47% annualized, another YieldBoost scenario.

Volatility Insights

The implied volatility for both the put and call contracts is about 31%. In contrast, the actual trailing twelve-month volatility, calculated from the past 251 trading days and the current price of $199.65, stands at 27%. For more insights on other put and call options, consider visiting StockOptionsChannel.com.

For further related data:

Top YieldBoost Calls of the Nasdaq 100 »

Also see:

• ORA Next Dividend Date
• CELG Price Target
• Simon Property Group YTD Return

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.