Investors in Alcoa Corporation (NYSE: AA) can now access new options contracts expiring in June 2027. A notable put option at the $60.00 strike price currently has a bid of $10.65, allowing sellers to potentially reduce their cost basis to $49.35 per share. This represents an approximate 5% discount to the current share price of $62.84 and has a 68% chance of expiring worthless, offering a potential 17.75% return on cash commitment, or 17.65% annualized.
On the call side, there is a $65.00 strike price contract with a bid of $14.70. Selling this covered call would commit investors to sell shares at $65.00, resulting in a total return of 26.83% if exercised. This option carries a 37% chance of expiring worthless as well, potentially yielding a 23.39% additional return or 23.27% annualized.
The implied volatility for the put contract is 62%, while the call option reflects 64%. In contrast, Alcoa’s trailing twelve-month volatility is calculated at 55%.
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