New CVS Options Trading: Insights into July 2025 Contracts

Investors in CVS Health Corporation (Symbol: CVS) witnessed new options available for trading today, set to expire in July 2025. The time value plays a significant role in option pricing, and with 206 days left until expiration, the latest trading contracts could offer sellers of puts or calls a chance to earn higher premiums compared to options with shorter time frames.

Analyzing the CVS Put Option

The put contract at a $42.50 strike price features a current bid of $2.71. Should an investor choose to sell this put contract, they would pledge to buy the stock at $42.50 while also pocketing the premium. This results in an effective purchase price of $39.79 per share (excluding broker fees). For someone keen on buying CVS shares, this approach might be more appealing than the current market price of $44.06.

At the moment, the $42.50 strike represents a roughly 4% discount from the stock’s trading price—placing it out-of-the-money by a similar percentage. There’s also a 59% chance that the put contract will expire worthless, based on current analytical data. Stock Options Channel will monitor these odds and share updates on their website.

If the put expires without value, the premium would yield a 6.38% return on the investment, translating to 11.30% on an annual basis. This yield is what Stock Options Channel terms the YieldBoost.

A Closer Look at the Call Option

On the call option side, there’s a contract available at a $55.00 strike price with a current bid of $1.27. If an investor purchases CVS stock at the existing price of $44.06 per share and sells this call as a covered call, they would agree to sell shares at $55.00. Collecting the premium alongside this would yield a total potential return of 27.71% if the shares are called away at the expiration date (again, before accounting for broker commissions). However, if CVS shares appreciate significantly, this strategy may not capture all available gains.

The $55.00 strike equates to approximately a 25% premium over the current stock price, making it out-of-the-money by this percentage. There’s a 75% chance that the covered call may expire worthless, allowing the investor to retain both their stock and the premium. Stock Options Channel will track and publish updates on these odds as well.

Should the covered call expire worthless, the premium represents a 2.88% additional return for the investor, or 5.11% annualized—again referred to as the YieldBoost.

Volatility Insights

The implied volatility for the put option stands at 41%, while the call option has an implied volatility of 39%. Meanwhile, the actual trailing twelve-month volatility is calculated at 37%, based on the previous 251 trading days and the current stock price of $44.06. For additional options contract ideas, visit StockOptionsChannel.com.

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