New Options on the Horizon
Investors tracking Principal Financial Group Inc (Symbol: PFG) witnessed a fresh wave of options hitting the market this week, all set to expire on March 15th. Stock Options Channel’s YieldBoost formula meticulously combed through the PFG options chain, uncovering a put contract that piqued interest among traders.
If we delve deeper into the specifics, the put contract at the $80.00 strike price boasted a current bid of 5 cents. Should an investor opt to sell-to-open this put contract, they’d be taking on the commitment to acquire the stock at $80.00. However, sweetening the deal, they’d also pocket the premium, effectively lowering the cost basis for the shares to $79.95 (sans broker commissions). For those eyeing a stake in PFG, this could offer a tantalizing proposition compared to the current market price of $81.22 per share.
Seeking Value in the Options Market
Eying the $80.00 strike brings to light an approximate 2% markdown from the prevailing trading price of the stock, nudging it slightly out-of-the-money by that percentage. Consequently, there exists the scenario where the put contract may see its end without value. Present-day analytical data, encompassing greeks and implied greeks, place the current odds of such an outcome at a substantial 86%. Stock Options Channel diligently monitors these odds, set to unveil any fluctuations over time via a dedicated chart accessible on our site, meticulously updated for this contract. Should fate lead to the contract’s worthlessness, the premium will translate into a 0.06% return on the cash pledge, equivalent to a promising 22.81% annualized yield — a phenomenon we fondly dub the YieldBoost.
Analyzing Volatility and More
A picture is worth a thousand words, and a chart speaks volumes. Below lies a visual representation of the preceding twelve months in trading history for Principal Financial Group Inc, emphasizing the $80.00 strike’s position relative to this historical backdrop.
Bridging back to the put contract discussed earlier, the implied volatility stands at an intriguing 49%. Concurrently, the actual trailing twelve-month volatility, amassing the previous 251 trading day closes alongside today’s $81.22 price tag, reveals itself at 23%. For a reservoir of put and call options contract concepts meriting exploration, journey over to StockOptionsChannel.com.
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