Investors in Amazon.com Inc (AMZN) can explore new options as of today, with contracts set to expire on March 18, 2023. Notably, a put contract at the $200.00 strike price is currently bid at $4.45, allowing sellers to commit to buying shares at a cost basis of $195.55, providing a potential 1% discount from the current trading price of $202.90.
On the calls side, a contract with a $205.00 strike price has a bid of $5.50. Investors who purchase shares at $202.90 and sell the call would commit to selling at $205.00, yielding an estimated total return of 3.75% if the shares are called away. Current analysis indicates a 50% chance of the call contract expiring worthless, allowing investors to retain both their shares and the premium collected, contributing an additional 2.71% return on their investment.
The implied volatility for the put contract is calculated at 40%, while the call stands at 39%. The actual trailing twelve-month volatility is 35%.
