Revolutionizing Investment Strategies
Traders delving into the realm of Clorox Co (Symbol: CLX) were greeted with a fresh array of options today, marking the genesis of possibilities for the May 31st expiration. Stock Options Channel, renowned for its financial acumen, meticulously scrutinized the CLX options spectrum, singling out one put and one call contract that beckoned with promise.
Exploring the Put Option Landscape
The $120.00 strike put contract emanated with a bid of 5 cents, flaunting an enticing proposition. For the daring investor venturing to sell-to-open this contract, the voyage would entail a commitment to acquire the stock at $120.00, yet with a silver lining – the alluring premium accompanying it. Consequently, the cost basis of the shares would stand adorned at $119.95, an alternative music to the ears of a CLX enthusiast rather than shelling out $144.88/share at the current juncture.
Fortune Favors the Bold – The Call Option Saga
On the flip side, a call contract at the $165.00 strike price beckoned with a bid of 10 cents, instigating a dance of possibility. A scenario unfolded where an investor procuring CLX shares at the present price tag of $144.88/share could engage in a “covered call” affair, pledging to vend the stock at $165.00. Should this narrative unfold at the May 31st expiration, excluding dividends, a 13.96% total return would beckon (before broker commissions). Yet, the cautionary whisper of forsaken potential lures if CLX stocks shoot for the stars, underscoring the essence of scrutinizing the company’s trading history and business fundamentals.
The Vibrant Tapestry of Probability
Both the put and call options unveil a tapestry woven with odds. The put contract exudes an 89% probability of fading into oblivion, while its call counterpart flaunts an 84% chance of meeting a similar fate. Stock Options Channel graciously extends an invitation to witness the ebb and flow of these odds over time, guiding investors through the turbulent seas of uncertainty.
Perception and Reality – Unveiling Volatility
An intricate dance of percentages unfolds as the implied volatility in the put contract stands at 44%, contrasting the call contract’s 32%. Meanwhile, the cloak of actual trailing twelve-month volatility, embracing the last 251 trading day closing values tethered to today’s price of $144.88, stands resolute at 23%. For avid explorers seeking more avenues of wisdom in the realm of put and call options, a pilgrimage to StockOptionsChannel.com beckons.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
