Investors in Novartis (NVS) saw new options for November 20, 2023, become available today. Notably, a put contract at a $145.00 strike price has a current bid of $7.20, allowing sellers to potentially purchase shares at a cost basis of $137.80, which is a 2% discount from the current trading price of $147.75. The odds of this put contract expiring worthless are estimated at 59%, with a potential return of 4.97% on cash commitment, or 8.93% annualized.
Additionally, a call contract at a $150.00 strike price is available with a bid of $9.50. If an investor buys shares at $147.75 and sells the call, they could see a return of 7.95% if the stock is called away by the November expiration. The odds of this contract expiring worthless are 49%, with a potential additional return of 6.43% or 11.56% annualized if it does expire worthless.
Implied volatility for the put contract is 24%, while the call has a volatility of 29%. The trailing twelve-month volatility, based on the last 251 trading days, is calculated at 21%.
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