New Options for Tradeweb Markets Present Potential Investment Opportunities

Investors in Tradeweb Markets Inc (Symbol: TW) can now consider new options available for February 2025. Stock Options Channel has identified noteworthy put and call contracts in the TW options chain.

Put Contract Insights

The $130.00 strike price put contract has a current bid of $4.90. Selling this put contract means the investor commits to buy the stock at $130.00 while collecting the premium. This reduces the effective cost basis of the shares to $125.10 (before broker commissions). For those looking to buy TW shares, this strategy could be more appealing than purchasing at the current price of $131.97 per share.

It’s important to note that the $130.00 strike is about a 1% discount from the current stock price. Therefore, there’s a chance the put contract could expire worthless. Current analytics suggest a 58% probability of this scenario. Stock Options Channel will continue to monitor these odds and update them on their website, including a chart detailing these statistics. Should the contract expire worthless, investors could see a return of 3.77% on the cash commitment, which annualizes to 21.84%, a figure we refer to as YieldBoost.

Call Contract Highlights

On the call side, the $135.00 strike price contract has a bid of $5.50. If an investor buys TW shares at the current price of $131.97 and sells this call as a “covered call,” they’d commit to selling the stock at $135.00. Assuming the stock is called away at expiration, the total return (excluding any dividends) would be approximately 6.46% (before broker commissions). However, it’s crucial to consider that significant upside could be missed if TW experiences substantial price increases, making it important to review both the trading history and the company’s fundamentals. 

The $135.00 strike is about a 2% premium over the current trading price. Thus, there is still a chance that the covered call could expire worthless, allowing the investor to keep both their shares and the premium collected. The odds of this happening stand at 53%. Stock Options Channel will track and regularly update these probabilities as well. If the covered call expires worthless, the premium could provide an additional 4.17% return, or 24.15% annualized, which is also categorized as YieldBoost.

Volatility Considerations

The implied volatility for the put contract is at 33%, while the call contract holds an implied volatility of 32%. In comparison, the actual trailing twelve-month volatility, derived from the last 251 trading days and the current price of $131.97, is calculated at 21%. For further ideas on put and call options worth considering, please 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.