New Fortress Energy Options Trading: Key Insights for Investors
New Options on New Fortress Energy Begin Trading
Investors in New Fortress Energy Inc (Symbol: NFE) have access to new options this week, with their expiration date set for September 19th. These options represent a significant opportunity for investors, as they offer 245 days until expiration. This extended time frame can lead to higher premiums for both put and call contracts compared to those with shorter durations.
Analyzing the $15 Put Option
Among the newly available options, a put contract with a $15.00 strike price currently has a bid of $2.95. If an investor chooses to sell this put contract, they agree to buy the stock at $15.00. When accounting for the premium collected, the effective purchase price drops to $12.05 per share (excluding broker commissions). For those considering a purchase of NFE shares, this offers an appealing alternative to the current market price of $16.11.
The $15.00 strike is about 7% lower than the stock’s current price, meaning it is somewhat unlikely to be exercised. Analytical data indicates a 68% chance that the contract will expire worthless, and if that happens, the premium represents a 19.67% return on the cash commitment, translating to 29.30% on an annualized basis. This metric is known as the YieldBoost.
Below is a chart showing the trailing twelve-month trading history for New Fortress Energy Inc, with the $15.00 strike highlighted in green:
Exploring the $17 Call Option
On the calls side, a contract with a $17.00 strike price has a current bid of $3.60. Investors purchasing shares of NFE at the current price of $16.11, while simultaneously selling this call option as a “covered call,” would lock in a selling price of $17.00. If the stock price reaches this level at the September 19th expiration, the total return—excluding dividends—would be 27.87% after accounting for the premium. However, this strategy could limit potential gains if NFE shares appreciate significantly.
The $17.00 strike price also sits about 6% above the current trading price, meaning there is a chance the call contract could expire worthless as well. Current analytics suggest a 39% likelihood of this outcome. If it expires worthless, investors would retain both their shares and the premium collected, leading to a 22.35% additional return on their investment or 33.30% annualized, again highlighted as a YieldBoost.
Below is a chart displaying NFE’s trailing twelve-month trading history, with the $17.00 strike marked in red:
Volatility Insights
The put contract shows an implied volatility of 81%, while the call contract’s implied volatility stands at 77%. In contrast, the calculated actual volatility over the last twelve months, based on 251 trading days and the current share price of $16.11, is 69%.
For further options contract ideas and analysis, visit StockOptionsChannel.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
