Investors in American Express Co. (AXP) can now access new options with an expiration date of August 21, 2023, allowing for a potential opportunity to achieve higher premiums due to the 101 days until expiration. A notable option includes a put contract at a $310.00 strike price, currently bid at $15.80, which could result in a cost basis of $294.20 per share if executed. This strike price is approximately 1% below the current trading price of $312.56, with a 57% probability that the contract will expire worthless, potentially providing a 5.10% return on cash commitment or 18.42% annualized.
On the call side, there is a $320.00 strike price contract offered at $15.30. If an investor buys AXP shares and sells this call as a covered call, the total return would be 7.28% if the stock is called away by expiration. This strike represents about a 2% premium to the current share price, with a 52% chance of expiring worthless. Should it do so, the premium collected would yield a 4.90% boost or 17.69% annualized. The implied volatility for both contracts stands at approximately 30%, with trailing twelve-month volatility calculated at 26%.
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