Investors in Archer Daniels Midland Co. (ADM) can now access new options contracts expiring on November 20, 2023, presenting potential opportunities for options sellers. The put option at a $70.00 strike price has a current bid of $0.70, allowing sellers to potentially acquire shares at an effective cost basis of $69.30 if exercised, representing a 13% discount from today’s trading price of $80.30. Current data suggests a 78% probability that this put could expire worthless.
On the call option side, the contract at a $82.50 strike price has a bid of $2.55. Investors selling this covered call would commit to sell shares at $82.50, potentially generating a total return of 5.92% if exercised. This call is currently 3% out-of-the-money with a 53% chance of expiring worthless. The implied volatility for the put is 39% and for the call is 33%, while the trailing twelve-month volatility is calculated at 27%.
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