Agnico Eagle Mines Options Trading Insights for Investors

Investors in Agnico Eagle Mines Ltd (Symbol: AEM) are seeing new options begin trading today, with a focus on contracts expiring June 27th. The options chain has revealed noteworthy contracts for analysis.

Exploring the Put Option at $112.00

The put contract at the $112.00 strike price currently has a bid of $2.85. Should an investor decide to sell-to-open this put option, they commit to purchase the stock at $112.00, while also collecting the premium. This arrangement effectively lowers the cost basis for the shares to $109.15 (before broker commissions). For those already interested in buying shares of AEM, this could be a compelling alternative to paying the current price of $115.98 per share.

Importantly, since the $112.00 strike is about a 3% discount from the current trading price, the likelihood of this put option expiring worthless stands at 64%, according to current analytical data, including greeks and implied greeks. These odds will be monitored over time, and updates will be available on our site’s contract detail page. If the contract were to expire worthless, the collected premium would yield a 2.54% return on the cash commitment, or 18.58% annualized—a figure we refer to as the YieldBoost.

Visualizing the Trading History

Below is a chart illustrating Agnico Eagle Mines Ltd’s trailing twelve-month trading history, with the $112.00 strike highlighted in green:

Analyzing the Call Option at $117.00

On the call side, the contract at the $117.00 strike price has a current bid of $4.30. If an investor buys shares of AEM at the current price of $115.98 and sells-to-open this call contract as a “covered call,” they commit to selling the stock at $117.00. Including the premium collected, this scenario would offer a total return of 4.59% if the stock is called away at the June 27th expiration (excluding dividends and before broker commissions).

Caution is warranted here, as significant upside could be left untapped if AEM shares rise dramatically. Review of the trailing twelve-month trading history and fundamental analysis of the business is vital. Below is a chart showing AEM’s trading history with the $117.00 strike highlighted in red:

This $117.00 strike represents a roughly 1% premium to the current trading price. Thus, there is a chance that the covered call could expire worthless, allowing the investor to retain both the shares and the premium collected. Current analytical data indicates these odds at 48%. Similar to the put option, we will track these statistics over time, publishing updates on our website. Should the covered call expire worthless, the premium would equate to a 3.71% additional return for the investor, or 27.07% annualized, which we also classify as YieldBoost.

Volatility Overview

The implied volatility for the put contract is 37%, while the call contract has an implied volatility of 35%. In contrast, the actual trailing twelve-month volatility, based on the last 250 trading days along with today’s price of $115.98, sits at 33%. For more options contract ideas, consider exploring additional resources.

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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.