Investors in CDW Corp (Symbol: CDW) gained access to new options today, set to expire on August 21st, providing an opportunity for enhanced premiums on put and call contracts. Notably, a put contract at the $125.00 strike price has a bid of $6.30, requiring an investor to commit to purchasing the stock at $125.00, effectively lowering their cost basis to $118.70. This reflects a discount of approximately 3% compared to the current trading price of $128.99, with a 61% probability that the contract may expire worthless.
On the call side, a contract at the $130.00 strike price is available with a bid of $9.40. If investors opt for a covered call, they could realize a potential return of 8.07% if the stock is called away at expiration, although this comes with a risk of missing out on further gains if the stock price significantly increases. The likelihood of this contract expiring worthless is currently estimated at 46%.
Implied volatility for the put contract is at 47%, while the call contract stands at 50%, which may influence investors’ decisions moving forward. The actual trailing twelve-month volatility is calculated to be 41%.
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