Investors in Amazon.com Inc (AMZN) saw new options begin trading today, targeting a July 15th expiration. Notably, a put contract at a $230 strike price has a current bid of $2.23, equating to an effective purchase cost of $227.77 per share after the premium is applied—approximately a 4% discount from the current trading price of $238.63. The likelihood that this put contract could expire worthless is estimated at 73%.
On the calls side, a contract at the $240 strike price is bid at $5.00. If an investor buys shares at $238.63 and sells this call, they are committing to sell at $240, potentially yielding a total return of 2.67% by expiration, with a 51% chance that the contract may expire worthless. Both contracts bear implied volatility rates of 32% for the put and 33% for the call.
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