Devon Energy Corp. (NYSE: DVN) has introduced new options expiring October 9th, 2023, including a put contract at a $43.00 strike price with a current bid of 30 cents. If sold to open, this contract would obligate the investor to buy shares at $43.00, effectively lowering the cost basis to $42.70—an 8% discount to the current trading price of $46.49. The likelihood of this put contract expiring worthless is estimated at 71%, which translates to a potential 0.70% return on cash commitment, or an annualized 5.92% YieldBoost.
On the call side, a $50.00 strike price call contract is available, with a current bid of 45 cents. If executed, it would enable an investor who buys shares at $46.49 to sell them at $50.00, resulting in an 8.52% total return at expiration while collecting the premium. The odds of this call contract expiring worthless stand at 64%, offering a potential 0.97% return, or 8.22% annualized YieldBoost.
The implied volatilities for the put and call contracts are 50% and 47%, respectively, while the trailing twelve-month volatility is calculated at 35%.
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