Investors in Tower Semiconductor Ltd. (TSEM) will see new options trading begin today, with contracts set to expire on September 18th, 2023. Notably, the put contract at a $185 strike price has a current bid of $38.10, allowing investors to potentially purchase shares at an effective cost of $146.90, which is about a 23% discount off the current trading price of $191.61. There is a 63% chance that this contract could expire worthless.
On the calls side, the $195 strike price has a bid of $38.20. If investors execute a covered call by selling this contract, they could secure a total return of 21.71% if the stock is called away at expiration. Additionally, there is a 41% chance the call might expire worthless, allowing investors to keep both their shares and the collected premium. The implied volatility for the put and call contracts stands at approximately 83% and 82%, respectively, while the actual trailing twelve-month volatility is 61%.
