Key Options for Fiserv Investors: May 30 Expiration Insights

Investors in Fiserv Inc (Symbol: FI) will find new options available today, set to expire on May 30th. Using our YieldBoost formula, Stock Options Channel has analyzed the FI options chain, pinpointing one put and one call contract of significant interest.

Highlighting the Put Contract

The put contract at the $205.00 strike price currently has a bid of $11.20. By selling-to-open this put, an investor commits to buying shares of FI at $205.00 while collecting the premium. This effectively lowers the cost basis of the shares to $193.80 (prior to broker commissions). For those already looking to buy FI shares, this option offers an appealing alternative to the current market price of $206.26 per share.

The $205.00 strike is about a 1% discount relative to the ongoing trading price, which means the put contract is out-of-the-money by that margin. Our current analytical data indicates a 56% chance that the put could expire worthless. Stock Options Channel will monitor these odds over time and provide updates on our website under the contract detail page for this option. If it does expire worthless, the premium represents a 5.46% return on the cash commitment, which annualizes to 39.88%—a figure we refer to as the YieldBoost.

Below is a chart illustrating the trailing twelve-month trading history for Fiserv Inc, with the $205.00 strike price marked in green:

Analyzing the Call Contract

On the calls side, the $210.00 strike price currently bids at $10.10. An investor purchasing shares of FI at the current price of $206.26 and selling-to-open this call as a “covered call” commits to selling the stock at $210.00. Including the premium collected, this arrangement could result in a total return (excluding any dividends) of 6.71% if the stock is called away by the May 30th expiration (before broker commissions). However, caution is warranted, as significant upside might be left on the table if FI’s price increases substantially. It is crucial to consider Fiserv’s ongoing trading patterns and business fundamentals. Below is the chart showcasing FI’s trading history, highlighting the $210.00 strike in red:

Notably, the $210.00 strike price represents approximately a 2% premium to the current trading price, indicating it is out-of-the-money by that same percentage. Consequently, there is a chance that this covered call could also expire worthless, allowing the investor to retain both the shares and the collected premium. Current analytics suggest a 50% probability of this occurring. Stock Options Channel will track these odds and publish updates on the contract detail page, charting the trading history of the option contract as well. Should the covered call expire worthless, the premium translates to a 4.90% boost in returns or 35.75% annualized—also referred to as the YieldBoost.

The put contract shows an implied volatility of 46%, while the call contract indicates an implied volatility of 44%. In comparison, we calculate the actual trailing twelve-month volatility based on the last 251 trading days and today’s price of $206.26 to be 24%. For additional options contract ideas worth exploring, visit 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.