American Airlines Options Trading: A Closer Look at $14.50 Strike Contracts
New Trading Opportunities for January 2025
Today marked the launch of new options trading for American Airlines Group Inc (Symbol: AAL), specifically for contracts expiring in January 2025. Stock Options Channel has analyzed these new contracts and flagged a notable put option.
A Potentially Profitable Put Contract
The identified put contract is set at a $14.50 strike price, currently with a bid of 16 cents. By selling to open this put contract, an investor agrees to buy the stock at $14.50 while also earning the premium. This arrangement effectively lowers the cost basis for shares to $14.34, which is lower than the current market price of $14.59. For those looking to invest in AAL, this could be an appealing option.
Understanding the Risks and Rewards
This $14.50 strike price is about 1% lower than AAL’s current trading price, classifying it as out-of-the-money. There is a chance that this put contract might expire worthless, with current estimates suggesting a 57% likelihood of this occurring. Stock Options Channel will monitor these probabilities over time and provide updates on their website. If the contract does expire worthless, investors could see a return of 1.10% on their cash commitment, translating to an annualized yield of approximately 9.15%, which we refer to as the YieldBoost.
Market Context: AAL’s Trading History
Below is a chart depicting the last year’s trading history for American Airlines Group Inc. The green area marks the position of the $14.50 strike price in relation to this history:
Volatility Insights
The implied volatility for this put contract is currently at 77%. In contrast, the actual trailing twelve-month volatility, based on the last 252 trading days and today’s price, is calculated to be 42%. For additional options trading ideas, both puts and calls, check out StockOptionsChannel.com.
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Also see:
- SPRO Historical Earnings
- Funds Holding IBDN
- UWMC Market Cap History
The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
