Alcon Inc (ALC) Options Trading: Insights on New Opportunities

Exploring the Latest Options Strategies Available for ALC Investors

Investors in Alcon Inc (Symbol: ALC) recently saw new options start trading for the April 17th expiration date. Using our YieldBoost formula at Stock Options Channel, we’ve analyzed the ALC options chain to highlight two interesting contracts: one put and one call.

The put contract with a strike price of $87.50 currently has a bid of $2.55. By selling this put contract, an investor agrees to buy the stock at $87.50, while collecting the premium. This effectively reduces the cost basis for the shares to $84.95, prior to broker fees. For those considering buying ALC shares at today’s market price of $89.42, this could be a compelling option.

The $87.50 strike price offers roughly a 2% discount compared to the current trading price, indicating it’s out-of-the-money by that margin. There’s a potential risk that this put contract may expire worthless, with current analytical data indicating a 62% chance of that happening. Stock Options Channel will monitor these odds over time, and provide updated metrics on our website. If the put contract does expire worthless, it could yield an attractive 2.91% return on the cash commitment, translating to a significant 20.47% annualized return — a concept we refer to as YieldBoost.

Below, you’ll find a chart displaying Alcon Inc’s trading history over the past twelve months, highlighting where the $87.50 strike price sits in relation to that history:

Shifting focus to the call side, the contract at the $90.00 strike price currently has a bid of $3.70. If an investor buys shares of ALC at the current price of $89.42 and sells this call contract as a “covered call,” they agree to sell the stock at $90.00. Including the premium, the potential total return (excluding dividends) could be 4.79% if the stock is called away at the April 17th expiration date (before broker commissions). However, significant upside could be lost if ALC shares rise sharply, which underscores the importance of examining Alcon’s trading history and business fundamentals. Below is a chart illustrating ALC’s twelve-month trading history, with the $90.00 strike highlighted in red:

Notably, the $90.00 strike price represents an approximate 1% premium over the current trading price of the stock. This means there’s a possibility the covered call contract may also expire worthless, allowing the investor to keep both the stock and the premium. Current analytical data indicates a 48% chance of this outcome. Stock Options Channel will track these figures and display them on our website in the contract detail section. Should the covered call contract expire worthless, the premium could provide an additional 4.14% return, or an annualized 29.07% — also known as YieldBoost.

The implied volatility for both the put and call contracts stands at roughly 29%. In comparison, the actual trailing twelve month volatility, based on the last 249 trading day closing values, is calculated at 22%. For more options contract ideas that merit consideration, please visit StockOptionsChannel.com.

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Also see:

• CPT Dividend History
• SUNW market cap history
• SJ Average Annual Return

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