Today marks the commencement of trading for new options on Spire Inc (SR), set to expire on April 19th. Investment enthusiasts noting the occasion can take advantage of this development by considering a put and a call contract, both of which have piqued the interest of experts at Stock Options Channel.
The Attraction of Put Contracts
Individuals eyeing potential investment opportunities can explore the put contract at the $55.00 strike price, currently carrying a bid of 10 cents. Opting to sell-to-open this put contract puts investors in line to secure the stock at $55.00, along with collecting the premium. Effectively, this sets the cost basis of the shares at $54.90 (before broker commissions). In comparison, this presents an enticing alternative for investors considering the current share price of $59.46.
Given that the $55.00 strike marks an approximate 8% discount to the current trading price of the stock (thus rendering it out-of-the-money by that figure), there exists a potential that the put contract may expire worthlessly. Current data, including greeks and implied greeks, indicate odds of 99% for this outcome. Stock Options Channel will continuously monitor these probabilities and publish the corresponding chart on the website.
Should the put contract expire without value, the premium represents a return of 0.18% based on the cash commitment, or 1.04% annualized, commonly referred to as the YieldBoost.
The Allure of Call Contracts
On the calls end of the option chain, the call contract at the $60.00 strike price is drawing attention with a current bid of 10 cents. Investors contemplating this opportunity can purchase SR stock at the current price level of $59.46/share and then sell-to-open the call contract as a “covered call.” This would commit them to selling the stock at $60.00, earning a total return (excluding dividends, if any) of 1.08% if the stock is called away upon the April 19th expiration (before broker commissions).
Naturally, there is the prospect of potential upside left on the table if SR shares experience a substantial surge, making it crucial to examine the business fundamentals and the trailing twelve-month trading history for Spire Inc. The $60.00 strike is highlighted in red on the chart reflecting the said trading history.
Given that the $60.00 strike represents an approximate 1% premium to the current trading price of the stock, there is also the potential for the covered call contract to expire valueless. As with the put contract, the current odds of such an outcome stand at 99%, with Stock Options Channel committing to track changes and publishing corresponding data on the website.
If the covered call contract expires without value, the premium would represent an extra return boost of 0.17% to the investor, or 0.96% annualized, referred to as the YieldBoost.
Market Volatility and Further Insight
The actual trailing twelve-month volatility stands at 22%, considering the last 251 trading day closing values and today’s price of $59.46. For more put and call options contract ideas, StockOptionsChannel.com provides a treasure trove of valuable information worthy of exploration.
Discover More:
– Top YieldBoost Calls of the S&P 500
Also see:
– High Yield Stocks
– VEU Dividend History
– Funds Holding ESGC
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
