Bristol Myers Squibb Co. (BMY) recently launched new options contracts, expiring on May 1st, 2023. A noteworthy put contract at the $54.00 strike price has a current bid of $1.79, presenting an opportunity for investors to acquire shares at an effective cost basis of $52.21, about an 8% discount from the current trading price of $58.77. There is a 76% likelihood that this put contract will expire worthless, potentially yielding a 3.31% return on cash commitment.
Additionally, a call contract at the $63.00 strike price is available with a current bid of $1.28, allowing investors to sell shares at a 9.38% total return if exercised. This strike price also reflects a 7% premium over the current price, with a 67% chance of expiring worthless. If that occurs, the premium would enhance returns by 2.18%, equivalent to an annualized yield of 15.90%.
Implied volatilities for the put and call contracts stand at 45% and 39%, respectively, while actual trailing twelve-month volatility is calculated at 29%. Investors are encouraged to monitor these options for potential benefits as the expiration date approaches.
