New C3.ai Options Present Opportunities for Investors
Exploring January 2025 Options Contracts
Investors in C3.ai Inc (Symbol: AI) have new options available as trading begins for the January 2025 expiration. Stock Options Channel has identified noteworthy put and call contracts from the new options chain.
The put contract at the $33.00 strike price is currently bid at $1.61. If an investor sells-to-open this put contract, they agree to buy the stock at $33.00 while also collecting the premium, reducing their effective cost basis to $31.39, not including broker commissions. For those interested in acquiring shares of AI, this could be a more appealing option than purchasing them directly at the current price of $36.24 per share.
The $33.00 strike price reflects a 9% discount from the current trading price, which places it out-of-the-money by that same percentage. Consequently, there’s a chance that this put contract may expire worthless. Current data indicates a 69% probability of that happening. Stock Options Channel will monitor these odds and provide updates over time on our website. If the contract does expire worthless, the premium would yield a 4.88% return on the cash commitment, or an impressive 40.47% annualized, a concept we refer to as YieldBoost.
Below is a chart displaying the trailing twelve-month trading performance for C3.ai Inc and where the $33.00 strike price stands within that context:
Analyzing the Calls Side of the Options Chain
On the call options side, the contract at the $41.00 strike price has a current bid of $1.95. If an investor chooses to buy AI shares at the current rate of $36.24 per share and subsequently sells-to-open this call contract as a “covered call,” they would commit to selling the stock at $41.00. Adding the premium into the mix, this would yield a total return of 18.52% at the January 2025 expiration, excluding any dividends and broker fees. However, investors might miss out on potential gains if AI’s stock price rises significantly, making it essential to consider the stock’s trading history and business fundamentals. Below is a chart illustrating AI’s trailing twelve-month trading history with the $41.00 strike highlighted:
The $41.00 strike is approximately 13% above the current stock price, suggesting that this call contract could also expire worthless. If that were to happen, investors would retain their shares and the collected premium. Current data shows a 60% likelihood of this occurrence. Stock Options Channel will also track these odds over time, publishing updates on our website. Should the covered call expire worthless, the premium would provide an additional 5.38% return, equating to a 44.64% annualized boost, again referred to as YieldBoost.
Implied volatility for the put contract is 82%, while the call contract has an implied volatility of 84%. Furthermore, we calculate the actual trailing twelve-month volatility, based on the last 252 trading days and today’s price of $36.24, to be 63%. For a wider selection of put and call options ideas, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
Also see:
- Utilities Stocks Hedge Funds Are Buying
- BW Options Chain
- Funds Holding MOS
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
