Kraft Heinz Introduces New Options for Investors
New Trading Opportunities for March
Investors in Kraft Heinz Co (Symbol: KHC) have new options available for trading, expiring on March 28th. Stock Options Channel has analyzed these contracts and highlighted one put and one call that stand out.
The put contract at the $25.00 strike price currently has a bid of 16 cents. If an investor sells this put contract, they agree to buy the stock at $25.00 and receive a premium, which lowers their effective cost to $24.84 per share (not counting broker commissions). For someone considering buying KHC at the current price of $28.89 per share, this option offers an appealing alternative.
This $25.00 strike price represents about a 13% discount to KHC’s current trading price. This means that there is a possibility the put contract may expire worthless. Current analytical data suggest the chances of this happening are 81%. Stock Options Channel will monitor these odds over time and provide updates on our website. If the put expires worthless, the premium would yield a return of 0.64% on the capital committed, translating to an annualized return of 4.68%, a statistic we call the YieldBoost.
Below, you can see a chart of Kraft Heinz Co’s trading history over the past twelve months, with the $25.00 strike price indicated in green:
Exploring Call Options
On the calls side, a contract at the $30.00 strike price has a current bid of 54 cents. If an investor buys KHC shares at the current price level of $28.89 and then sells this call as a “covered call,” they agree to sell the stock at $30.00. Adding the premium from the call would yield a total return of 5.71% if the stock is called away by the March 28th expiration (excluding any potential dividends). However, if KHC’s shares increase significantly, the investor may miss out on greater profits. Therefore, analyzing both KHC’s twelve-month trading history and understanding the company fundamentals is essential.
Below is a chart illustrating KHC’s trading history over the past twelve months, with the $30.00 strike price marked in red:
The $30.00 strike price reflects about a 4% premium to the current trading price. This means the covered call could also expire worthless, allowing the investor to keep their shares and the premium received. Present data suggest a 58% chance of this outcome. Stock Options Channel will continue to track these odds and provide updates on our site. If the covered call expires worthless, the premium results in a 1.87% additional return for the investor, an annualized figure of 13.66%, also classified as YieldBoost.
The put contract carries an implied volatility of 34%, while the call option has an implied volatility of 40%. In comparison, we calculate KHC’s actual trailing twelve-month volatility—based on the last 250 trading days and the current price of $28.89—to be 20%. For more options ideas, visit StockOptionsChannel.com.
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The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
