New April Options Highlight Opportunities in Discover Financial Services

Investors in Discover Financial Services (Symbol: DFS) were presented with new option contracts today, set to expire on April 25th. At Stock Options Channel, our YieldBoost formula analyzed the DFS options chain and identified two contracts of interest: one put and one call.

Put Contract Analysis

The put contract at the $175.00 strike price is currently bidding at $10.50. If an investor decides to sell-to-open this put contract, they commit to buy the Stock at $175.00. With the premium collected, the effective cost basis for the shares would be $164.50 (excluding broker commissions). For investors interested in acquiring DFS shares, this may offer a favorable alternative to the current market price of $176.76 per share.

Notably, the $175.00 strike is roughly a 1% discount from the current trading price, indicating it is out-of-the-money by that percentage. Current analytical data—including greeks and implied greeks—suggest that there is a 55% chance the put contract could expire worthless. Stock Options Channel will monitor these odds over time, providing updates on our website along with a detailed chart. If the contract does expire worthless, the premium would equate to a 6.00% return on cash commitment or 43.84% annualized, a figure we denote as the YieldBoost.

Charting Past Performance

Here is a chart demonstrating the trailing twelve-month trading history for Discover Financial Services, with the $175.00 strike visually indicated in green:

Call Contract Analysis

Turning to the call options, the contract at the $180.00 strike price has a bid of $10.00. Should an investor purchase shares of DFS at the current price of $176.76 and sell the call contract as a “covered call,” they would agree to sell the Stock at $180.00. Collecting the premium would yield a total return of 7.49% if the stock is called away at the April 25th expiration (excluding dividends and broker commissions). However, if DFS shares significantly increase, the investor could miss out on some upside potential. This highlights the importance of analyzing the company’s historical performance as well as understanding its fundamentals. Below is a chart showcasing DFS’s trailing twelve-month trading history, with the $180.00 strike highlighted in red:

The $180.00 strike is approximately a 2% premium to the current trading price, which means it is out-of-the-money by that percentage. There remains a 51% chance that the covered call could expire worthless, allowing the investor to retain both their shares and the collected premium. Analytics suggest that if this occurs, the return boost from the premium would amount to 5.66%, or 41.33% annualized—again classified as a YieldBoost.

Volatility Insights

The implied volatility for the put contract is 50%, while the call contract reflects an implied volatility of 52%. In contrast, the actual trailing twelve-month volatility, calculated using the last 250 trading days plus today’s closing price of $176.76, stands at 35%. For additional options strategies and insights, visit StockOptionsChannel.com.

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also see:

• DAIO Past earnings
• ORA Videos
• ELON Split History

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