Investors in Devon Energy Corp. (DVN) can now trade new options set to expire on October 30, 2023. A put contract at the $48.00 strike price currently has a bid of $0.14, allowing investors to effectively purchase shares at a cost basis of $47.86, which is a 2% discount compared to the current trading price of $48.84. There’s a 59% probability that this put will expire worthless, resulting in a potential yield of 0.29% on cash committed.
On the call side, a $50.00 strike price contract has a bid of $0.37. If investors buy DVN shares at $48.84 and sell this covered call, they could achieve a total return of 3.13% if the stock is called away by expiration. The odds of this call expiring worthless stands at 53%, providing a potential yield boost of approximately 0.76% or 5.53% annually. Implied volatility for the put contract is at 35%, while for the call it is 37%.
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