Investors in Alphabet Inc. (GOOGL) began trading new options today for expiration on June 24, 2023. A key put contract at the $340.00 strike price has a bid of 89 cents, offering investors the option to purchase shares at that price, reducing their cost basis to $339.11. This represents an approximate 8% discount from the current trading price of $367.84, with a 90% chance the contract may expire worthless.
On the calls side, a contract at the $375.00 strike price has a bid of $5.65. If investors buy shares at $367.84 and sell this covered call, they could achieve a total return of 3.48% if it gets called away. The likelihood of this contract expiring worthless is estimated at 56%, with a potential 1.54% boost in return, amounting to a 37.38% annualized yield boost.
Implied volatilities for the put and call contracts are 34% and 31%, respectively, while the actual trailing twelve-month volatility stands at 29%.
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