Investors in Macy’s Inc (Symbol: M) can now trade new options expiring on August 7th. Notably, a put contract at the $24.50 strike price is available, with a current bid of $0.20, suggesting a cost basis of $24.30 for shares if sold-to-open. This represents a 6% discount from the current trading price of $25.94. There is a 64% chance this put will expire worthless, offering a potential return of 0.82% on cash commitment, or 6.93% annualized.
On the call side, a $28.00 strike price contract has a current bid of $0.06. If an investor sells this covered call after purchasing shares at $25.94, they could realize an 8.17% total return, assuming the stock is called away at expiration. This call also carries a 60% chance of expiring worthless, potentially granting an annualized return of 1.96% if the premium is kept. The implied volatility for the put is 65%, while the call’s is 64%.
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