Investors in Microsoft Corporation (MSFT) gained access to new options today expiring on April 8. Notably, a put contract at the $370.00 strike price is currently bid at $4.80, offering a cost basis of $365.20 for shares, compared to the trading price of $372.98. This puts the put contract out-of-the-money by approximately 1%, with a 59% probability of it expiring worthless, potentially yielding a 1.30% return on the cash commitment.
On the call side, a $375.00 strike call contract is bid at $7.10. If investors buy shares at the current price and sell this call, they commit to a potential total return of 2.45% if the stock is called away. The call, also out-of-the-money by about 1%, has a 51% chance of expiring worthless, in which case investors retain both their shares and the premium collected, translating to a 1.90% additional yield. The implied volatility for the put is 27% and for the call, 30%.
