Investors in Chevron Corporation (CVX) have new options available for trading with expiration set for March 2027, including a put contract at a $200.00 strike price currently bid at $18.95. Selling this put would commit the investor to buying shares at $200.00, effectively lowering the cost basis to $181.05—approximately a 1% discount to the current share price of $202.44. There is a 59% probability the put could expire worthless, offering a potential return of 9.47% on the cash commitment, or 9.50% annualized.
On the call side, a contract with a $210.00 strike price is bid at $18.45. If investors buy shares at $202.44 and sell this covered call, they could achieve a total return of 12.85% if the stock is called by expiration. This strike is about 4% above the current trading price, with a 50% chance the call will expire worthless, yielding an additional 9.11% return, or 9.14% annualized. The implied volatility for both options is approximately 28%, while the trailing twelve-month volatility stands at 25%.
