Investors in Genuine Parts Co. (GPC) were presented with new options expiring in June 2027 on October 4, 2023. The put contract at the $95.00 strike price has a current bid of $10.10, offering the chance to acquire shares at an effective cost of $84.90. This represents a 3% discount to the current trading price of $97.67, with estimated odds of the put expiring worthless at 61%. The potential return on the cash commitment is 10.63%, or 9.92% annualized.
On the call side, the $100.00 strike price call has a bid of $9.90, allowing investors to lock in a total return of 12.52% if their shares are called away at expiration. This strike is approximately 2% above the current price, with a 49% chance of expiring worthless. If it does, investors would gain a 10.14% boost, or 9.46% annualized, from the premium collected. The implied volatility for both contracts is about 35%, while the trailing 12-month volatility sits at 29%.
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