New Covered Call Opportunities for United States Oil Fund Investors

Investors in the United States Oil Fund (Symbol: USO) gained access to new options today, set to expire on December 11th. The Stock Options Channel has pinpointed a specific call contract of interest within the USO options chain.

Focus on $73.00 Call Contract

One notable call contract at the $73.00 strike price currently has a bid of 4 cents. If an investor buys USO shares at the current price of $72.31 per share and sells the call contract as a “covered call,” they would agree to sell their stock at $73.00. This strategy could yield a total return of 1.01%, exclusive of any dividends and broker commissions, if the stock is called away at expiration. However, if USO shares rise significantly, a portion of potential profits could be missed. Therefore, examining USO’s past trading history and its business fundamentals is crucial.

Understanding Potential Outcomes

The $73.00 strike price is about 1% above the current trading price, meaning it is considered out-of-the-money. There’s a possibility the option will expire worthless, allowing investors to retain both their shares and the collected premium. Current analysis estimates a 50% likelihood of this scenario occurring. At Stock Options Channel, we will track these odds and publish updates, alongside a chart detailing the trading history of this option contract. If the call expires without being exercised, the premium earned would represent an additional 0.06% return, or an annualized 1.35%, known as the YieldBoost.

Volatility Insights

The implied volatility of the mentioned call contract is noted at 35%. Meanwhile, we have calculated the actual trailing twelve-month volatility, based on the past 252 trading days and the current price of $72.31, to be 28%. For additional options contract ideas, check out StockOptionsChannel.com.

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