Options for APA Corp (Symbol: APA) began trading this week, set to expire on August 15th. A notable put contract at the $17.50 strike price has a current bid of 26 cents, allowing investors to buy shares at an effective cost of $17.24, a 5% discount from the current market price of $18.34. The probability of this put option expiring worthless is estimated at 78%, potentially yielding a 1.49% return on investment, or 38.73% annualized.
Additionally, a call contract at the $20.00 strike price, with a bid of 37 cents, allows investors to sell stock at that price if they hold shares. This strategy could provide an 11.07% total return if the stock is called away at expiration. The likelihood of this call option expiring worthless is estimated at 68%, offering an additional potential return of 2.02%, or 52.60% annualized, should that happen.
The implied volatility for the put option is 57%, while the call option stands at 54%. The actual trailing twelve-month volatility is calculated to be 53%.
