New Opportunity for Investors in United States Oil Fund: January 2025 Options Unveiled

Exploring Covered Call Options on USO

Investors in the United States Oil Fund (Symbol: USO) have new options available today for the January 2025 expiration. Utilizing our YieldBoost formula at Stock Options Channel, we’ve analyzed the USO options chain and identified a noteworthy call contract.

The call contract at the $77.00 strike price currently has a bid of 23 cents. If an investor purchases shares of USO at the current price of $73.87/share, selling this call contract as a “covered call” means they agree to sell their shares at $77.00. By collecting the premium, this strategy could yield a total return of 4.55% (excluding any dividends) if the stock price reaches or exceeds the strike price by the January 2025 expiration. However, potential returns could be limited if USO shares rise significantly, underscoring the importance of examining the trailing twelve-month trading history and the company’s fundamentals.

Below is a chart showcasing USO’s trailing twelve-month trading history, highlighting the $77.00 strike price in red:

The $77.00 strike price represents approximately a 4% premium over the current trading price, indicating it is out-of-the-money by that percentage. Consequently, there is a chance that the covered call contract may expire worthless, allowing the investor to retain both their shares and the premium collected. Current analytical data suggests a 67% likelihood of this occurrence. At Stock Options Channel, we will monitor these odds over time and provide updates along with a chart detailing the trading history of the option contract.

If the covered call contract does expire worthless, the premium represents a 0.31% increase in return for the investor, translating to a 7.58% annualized boost referred to as the YieldBoost.

Currently, the implied volatility for the call contract stands at 27%. We calculate the actual trailing twelve-month volatility (factoring in the last 251 trading day closing values along with today’s price of $73.87) to also be 27%. For more insights on put and call options worth considering, visit StockOptionsChannel.com.

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