Investors in Abbott Laboratories (Symbol: ABT) are now able to trade new options set to expire on October 16th, 2023. The newly available contracts feature a put option with a strike price of $82.50, currently bidding at $4.10. Selling this contract allows an investor to commit to purchasing the stock at $82.50, effectively lowering their cost basis to $78.40, compared to the current share price of $84.72. This represents a potential 3% discount, with a 60% chance that the contract could expire worthless.
On the call side, a contract priced at $87.50 is currently bidding at $5.20. If purchased, this could yield a total return of 9.42% if the shares are called away at expiration. The $87.50 strike is roughly 3% above the current trading price, with a 51% probability of expiring worthless, allowing investors to retain both shares and the collected premium. The implied volatility for the put is 32% and for the call is 34%, while the actual trailing twelve-month volatility stands at 24%.
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