Evergy Inc (EVRG) has introduced new options for expiration on August 15th, including a notable put contract at a $65.00 strike price, which has a current bid of 65 cents. Selling this put would require an investor to buy the stock at $65.00, making their effective cost basis $64.35. This presents a 4% discount compared to the current trading price of $67.85. There is a 72% probability that the put contract could expire worthless, which would yield a 1.00% return on the cash commitment, or 6.89% annualized.
Additionally, a call contract at the $70.00 strike price with a bid of 50 cents is also available. Investors buying shares at $67.85 and selling this covered call would be committing to sell at $70.00 for a total return of 3.91% if the stock is called away. The probability of this call expiring worthless is 62%, which would allow investors to retain their shares and the premium, representing an additional 0.74% return or 5.08% annualized.
The implied volatility for the put contract is 21%, while the call contract stands at 23%. The trailing twelve-month volatility is calculated at 17%, considering the last 249 trading days.
