Today marks a new chapter in the saga of AFLAC Inc (Symbol: AFL) as options for the May 10th expiration have entered the trading arena. The Stock Options Channel has delved into the intricate dance of the AFL options chain to unearth one put and one call contract that have caught the discerning eye of many an investor.

The Put Contract at $80.00 Strike Price

With a current bid of 15 cents, the put contract at the $80.00 strike price beckons investors. Selling-to-open this contract entails a commitment to acquire the stock at $80.00, accompanied by the sweet premium that brings the cost basis down to $79.85 per share. For those eyeing AFL shares at $86.17 each today, this presents an enticing alternative.

Venturing into the realm of probabilities, the $80.00 strike lies 7% below the current trading price, positioning it as an out-of-the-money option. Statistical indicators point to a 77% chance of the put contract expiring worthless. Should this materialize, the premium heralds a 0.19% return on the cash commitment or 1.59% annualized – an occurrence we fondly term the ‘YieldBoost’.

The Call Contract at $92.00 Strike Price

On the flip side, the call contract at the $92.00 strike price is making waves with a bid of 10 cents. Opting for a covered call strategy involves selling this contract post purchasing AFL shares at $86.17 each. Committing to sell at $92.00, with the added allure of the premium, could yield a total return of 6.88% if the stock is called away at the May 10th expiration.

However, there’s a catch. The $92.00 strike boasts a 7% premium over the current trading price, making it an out-of-the-money prospect as well. Statistical models project a 73% likelihood of the covered call contract expiring worthless. In such a scenario, the investor retains both shares and premium, culminating in a 0.12% additional return or 0.99% annualized, affectionately dubbed the ‘YieldBoost’.

Evaluating the Options

Implied volatility stands at 32% for the put contract and 28% for the call contract. In contrast, the trailing twelve-month volatility, considering the last 251 trading days alongside today’s closing price of $86.17, hovers at 20%. For further insights into commendable put and call options, a visit to StockOptionsChannel.com beckons.