Investors Eye New Options for Phillips 66 with April Expiration

Investors in Phillips 66 (Symbol: PSX) saw new options trading begin today for the April 25th expiration. At Stock Options Channel, our YieldBoost formula has analyzed the PSX options chain and identified notable put and call contracts.

Put Contract Opportunities

The put contract at the $110.00 strike price currently has a bid of $1.60. Selling-to-open this put contract means an investor commits to buy the stock at $110.00, while collecting the premium, which lowers the effective cost basis to $108.40 (before broker commissions). Given the current trading price of $119.32 per share, this could be an appealing alternative for investors looking to acquire PSX shares.

This $110.00 strike represents about an 8% discount from the current trading price, placing it out-of-the-money by that same percentage. The analytical data suggests there is a 76% chance the put contract will expire worthless. We will monitor these odds over time, with charts published on the contract detail page of our website. If the contract does expire worthless, the premium equates to a 1.45% return on the cash commitment, translating to an annualized return of 10.63%, which we refer to as the YieldBoost.

Below, you can see a chart illustrating the trailing twelve-month trading history for Phillips 66, highlighting the position of the $110.00 strike:

Call Contract Insights

Looking at the call options, the contract at the $121.00 strike price has a current bid of $4.00. An investor could buy shares at the current price of $119.32 and sell-to-open this call contract as a “covered call,” obligating them to sell the stock at $121.00. This strategy could yield a total return of 4.76% upon the April 25th expiration (excluding dividends and broker commissions), assuming the stock is called away. However, substantial upside might be sacrificed if PSX shares rise significantly, making an analysis of historical trading trends and business fundamentals crucial.

Below is a chart reflecting PSX’s twelve-month trading history, with the $121.00 strike marked in red:

Since the $121.00 strike is approximately 1% above the current trading price, there is a likelihood that the covered call might expire worthless, allowing the investor to retain both their shares and the premium. Current analytics indicate a 52% probability of this outcome. We will also track the changing odds over time, with trading history charts available on our website. If the covered call expires worthless, the premium could deliver an additional return of 3.35% or an annualized 24.49%, termed the YieldBoost.

The implied volatility for the put contract stands at 33%, while the call contract has an implied volatility of 38%. In contrast, the actual trailing twelve-month volatility, based on the last 250 trading days as well as today’s price of $119.32, is calculated at 27%. For more options contract ideas, visit StockOptionsChannel.com.

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Also see:

• IMMR Price Target
• EGL Price Target
• Corplay Shares Outstanding History

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