Investors in Thermo Fisher Scientific Inc (TMO) saw new options begin trading today, with an expiration date of October 17th, 126 days away. One notable option is a put contract at the $270.00 strike price, currently bidding at $0.10. If sold, this would allow buyers to commit to purchasing TMO shares at an effective cost basis of $269.90, significantly lower than the current trading price of $408.95 per share. The $270.00 strike price reflects a 34% discount to the current price, with a 95% chance that the contract could expire worthless.
On the call side, a contract at the $430.00 strike price is bidding at $21.90. Selling this as a covered call could yield a total return of 10.50% if shares are called away by expiration. The $430.00 strike represents a 5% premium over the current trading price, and there’s a 53% chance this contract will also expire worthless, allowing the investor to retain both shares and the premium.
The implied volatility for the put contract is 49%, while for the call it is 33%. The actual trailing twelve-month volatility is calculated to be 27%.
