New Options Trading Opportunities Emerge for Hess Corp Investors

Investors in Hess Corp (Symbol: HES) will notice the commencement of trading for new options today, particularly those expiring on May 30th. At Stock Options Channel, our YieldBoost formula has analyzed the HES options chain and identified one put and one call contract that stand out.

Put Contract Insights

The put contract at a $130.00 strike price currently has a bid of $6.40. Investors who sell-to-open this put contract commit to purchasing the stock at $130.00 while collecting the premium. This effectively reduces the shares’ cost basis to $123.60 (before broker commissions). For those interested in buying shares of HES, this option could present an appealing alternative to the current market price of $131.44 per share.

Due to the $130.00 strike price being approximately 1% below the current trading price, there exists a possibility that the put contract may expire worthless. Data shows a 57% probability of this outcome based on current analytics, including Greeks and implied Greeks. Stock Options Channel will continue to track these odds over time, providing updates through a chart on our website under the contract details. If the contract does expire worthless, it would yield a 4.92% return on the cash commitment, equating to an annualized return of 35.94%, a figure we refer to as the YieldBoost.

Below is a chart illustrating the trailing twelve-month trading history for Hess Corp, highlighted in green to show the position of the $130.00 strike:

Call Contract Analysis

On the call side, the $135.00 strike call contract has a bid of $6.30. If an investor buys shares of HES at the current price of $131.44 per share and sells the call contract as a “covered call,” they commit to selling the stock at $135.00. Collecting the premium would yield a total return of 7.50% (excluding dividends, if any) if the stock is called away by the May 30th expiration, before considering broker commissions.

It’s important to analyze the trailing twelve-month trading history for Hess Corp along with business fundamentals, as significant upside could be left unrealized if HES shares increase significantly. The chart below illustrates HES’s trailing twelve-month trading history, with the $135.00 strike highlighted in red:

The $135.00 strike is about 3% above the current trading price. Hence, there is potential for the covered call contract to expire worthless, allowing the investor to retain both their shares and the premium collected. The analytics suggest that the probability of this happening is 52%. Stock Options Channel will monitor these odds over time, tracking changes on our website, including a chart of the trading history for this option. If the covered call contract expires worthless, it would provide an additional return boost of 4.79% for investors, or 34.99% annualized—another YieldBoost opportunity.

The implied volatility for the put contract stands at 45%, while the call contract’s implied volatility is slightly higher at 46%. Meanwhile, the actual trailing twelve-month volatility, based on the last 251 trading days coupled with today’s price of $131.44, is calculated to be 28%. For further ideas on put and call options contracts, please visit StockOptionsChannel.com.

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Also See:

• Funds Holding HCRF
• CLI shares outstanding history
• TZUP market cap history

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