Investors in Bristol Myers Squibb Co. (NYSE: BMY) gained access to new options contracts today, set to expire on November 20, 2023. Notably, a put contract at a $62.50 strike price is currently bid at $0.88, allowing sellers to potentially acquire shares at a cost basis of $61.62, presenting a 2% discount compared to the current trading price of $64.01. The likelihood of the put contract expiring worthless is estimated at 61%.
On the call side, a contract with a $72.50 strike price is bid at $0.30, offering a potential total return of 13.73% if exercised. This strike represents a 13% premium over the current stock price. There’s a 72% chance that this call contract will expire worthless, allowing investors to retain both their shares and the premium, potentially yielding an additional 1.69% annualized return.
The implied volatility for the put contract stands at 28%, while the call’s implied volatility is at 35%. The trailing twelve-month volatility for Bristol Myers Squibb is calculated to be 27%.
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