New Options Available for Clorox Investors: A Closer Look

Investors looking at Clorox Co (Symbol: CLX) have new options to consider as contracts set to expire on December 6th become available. Stock Options Channel has analyzed the options chain and identified a noteworthy put and a call contract in the recent offerings.

Evaluating the $155.00 Put Option

The put contract at the $155.00 strike price currently has a bid of $2.15. By selling to open this put contract, an investor commits to buying the stock at $155.00 while earning the premium, effectively lowering the cost basis of the shares to $152.85 (excluding any broker commissions). For investors who are already interested in buying CLX, this could be a more appealing option compared to the current market price of $158.40 per share.

Since the $155.00 strike price represents about a 2% discount from the current trading price, there’s a chance that the put contract will expire worthless. Current analysis indicates a 62% probability of this happening. Stock Options Channel will monitor these odds over time, providing updates on a dedicated chart on their website. If the contract indeed expires worthless, the premium would yield a 1.39% return on the cash commitment, equating to an annualized return of 11.76%, which Stock Options Channel refers to as the YieldBoost.

Reviewing the $160.00 Call Option

On the call options side, the $160.00 strike contract is available with a current bid of $4.00. Should an investor decide to buy shares of CLX at $158.40 and sell to open this call as a “covered call,” they would be securing the right to sell the stock at $160.00. By collecting the premium, this setup could result in a total return of 3.54% if the stock is called away at the December 6th expiration (before broker commissions). It’s crucial, however, to consider the potential for missing out on additional gains if CLX shares increase significantly. Thus, looking at the company’s recent trading history and evaluating its fundamentals are essential steps.

With the $160.00 strike representing a mere 1% premium over the current trading price, there’s also a chance the covered call may expire worthless. Current analytical data suggests a 51% probability of this. Stock Options Channel also intends to track these odds over time, providing a chart of these figures on their website. If the covered call expires worthless, the premium could offer a 2.53% boost to the investor’s returns, translating to an annualized rate of 21.41%, another example of YieldBoost.

Understanding Volatility in Options Trading

For context, the implied volatility for the put contract stands at 28%, while the call contract has 29% implied volatility. In comparison, the actual trailing twelve-month volatility, calculated from the last 251 trading days along with today’s price of $158.40, is 22%. For more options contract ideas, be sure to visit StockOptionsChannel.com.

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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.