Investors in S&P Global Inc. (SPGI) can now trade new options with an expiration date of October 16. Notably, a put option with a $250.00 strike price has a current bid of $1.15. Selling this contract would require purchasing shares at $250.00, effectively lowering the cost basis to $248.85. This represents a 40% discount from the current share price of $419.24, with a 96% chance of the contract expiring worthless.
On the calls side, a $430.00 strike price call option has a bid of $32.00. By purchasing SPGI shares and selling this call as a covered call, investors could see a potential return of 10.20% if the stock gets called away by the expiration date. The probability of this call contract also expiring worthless is currently estimated at 48%.
Implied volatility for the put contract is 48%, while for the call it’s 32%, compared to an actual trailing twelve-month volatility of 27%.
