FedEx Offers New Options: Analyzing July 3rd Contracts

Investors in FedEx Corp (Symbol: FDX) have new options available as of today, with contracts set to expire on July 3rd. The YieldBoost formula from Stock Options Channel has evaluated the FDX options chain to highlight one put and one call contract of particular interest.

Put Contract Overview

The put contract at the $215.00 strike price currently carries a bid of $8.80. By selling-to-open this put contract, an investor agrees to purchase shares at $215.00. This strategy also allows the investor to collect a premium, effectively lowering the cost basis to $206.20 (excluding broker commissions). For those already looking to buy FDX shares, this represents a potentially appealing alternative to the current trading price of $217.38 per share.

Notably, the $215.00 strike price is about 1% below the current trading price, making it out-of-the-money by that percentage. Current analytical data suggest there’s a 55% chance that the put contract could expire worthless. Stock Options Channel will continue to monitor these odds, providing updates and a chart on their website along with the contract details. Should the contract expire worthless, the premium collected would yield a 4.09% return on the cash commitment, equating to a 35.57% annualized return—termed a YieldBoost.

Below is a chart illustrating FedEx Corp’s trailing twelve-month trading history, highlighting where the $215.00 strike is positioned within that data:

Call Contract Overview

On the call side, the contract at the $220.00 strike price has a current bid of $8.15. If an investor buys shares of FDX at the current price of $217.38 per share and sells-to-open this call contract as a “covered call,” they agree to sell their shares at $220.00. With the premium collected, this strategy results in a total return of 4.95% if shares are called away at the July 3rd expiration (before broker commissions). However, it is important to consider that potential upside could be missed if FDX shares rise significantly.

Examining FedEx’s trailing twelve-month trading history alongside this contract is crucial for informed decision-making. Below is a chart that displays the same history, with the $220.00 strike highlighted:

It is important to note that the $220.00 strike price is roughly 1% above the current trading price, making it out-of-the-money by that same percentage. There exists a possibility the covered call contract could expire worthless, allowing the investor to retain both their shares and the collected premium. Current analytical data indicate a 51% chance of this happening. Stock Options Channel will keep track of these odds over time, illustrated with updated charts on their website. If the covered call expires worthless, the premium would represent an added return of 3.75%, translating to a 32.58% annualized return—also classified as a YieldBoost.

Volatility Analysis

The put contract displays an implied volatility of 41%, whereas the call contract sits at 40%. In contrast, the actual trailing twelve-month volatility, calculated using the last 250 trading day’s closing values along with today’s price of $217.38, is recorded at 38%.

For additional put and call options contract ideas, visit StockOptionsChannel.com.