Investors in Transocean Ltd (RIG) will have new options becoming available for expiration on May 8, including a notable call contract at the $7.00 strike price, which currently has a bid of 1 cent. If an investor buys shares at $6.87 and sells this call contract, they could achieve a total return of 2.04% if the stock is called away at expiration.
This $7.00 strike price represents a 2% premium over the current trading price, with a 41% chance that the covered call contract may expire worthless, allowing the investor to keep both shares and premium. The implied volatility of this call contract is 147%, while the actual trailing twelve-month volatility is calculated at 65%.
