Diageo Options Trading: New Opportunities for Investors
Investors watching Diageo plc (Symbol: DEO) can explore fresh options now available, with contracts set to expire in January 2026. With 346 days until expiration, these new options may offer sellers of puts or calls the chance to secure higher premiums compared to those with nearer expiration dates.
Analyzing the Put Contract at $115.00
The put contract at a strike price of $115.00 currently has a bid of $8.60. Selling this put contract means agreeing to buy the stock at $115.00 while pocketing the premium. This sets the effective purchase price at $106.40, which could be appealing for investors considering buying DEO shares priced at $116.86 today.
Given that the $115.00 strike price reflects a 2% discount from the stock’s current price, there’s a chance the put could expire worthless. Current analytical data suggest there’s a 59% probability of this happening. Stock Options Channel will monitor these odds and provide updates on their website.
If the put expires without value, investors would realize a 7.48% return on their cash commitment, translating to an annualized return of 7.89%. Stock Options Channel refers to this as the YieldBoost.
Call Contract Analysis at $120.00
Shifting focus to the call side, the $120.00 call contract is currently bid at $8.80. An investor who buys DEO shares at $116.86 and sells this call as a “covered call” would agree to sell the stock at $120.00. Including the premium, this strategy could yield a 10.22% total return if the call is exercised by January 2026.
However, should DEO shares rise significantly, potential gains may be capped. Understanding the stock’s past trading patterns and business fundamentals is vital. The trailing twelve-month performance of Diageo is indicated in the chart below, with the $120.00 strike price highlighted in red:
Since the $120.00 strike price represents a 3% premium to the current stock price, there’s also the possibility this covered call could expire worthless. Data shows a 48% likelihood of this outcome. Stock Options Channel will track and report these odds on their website.
If it expires without exercise, the premium would provide a 7.53% return boost, or 7.94% annualized, which is also categorized as a YieldBoost.
Volatility Insights
The implied volatility for the put contract stands at 27%, while the call contract shows 26%. In contrast, the actual trailing twelve-month volatility, assessing the last 250 trading days alongside today’s price of $116.86, is 23%. For additional options insights, visit StockOptionsChannel.com.
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Also see:
- Top Ten Hedge Funds Holding UACL
- TXO shares outstanding history
- MNPR Insider Buying
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
