Ford Motor Co. (Symbol: F) introduced new options today, specifically a put contract with a strike price of $10.00, set to expire on August 22nd. The current bid for this put contract is 8 cents, allowing investors to potentially purchase shares at a cost basis of $9.92, significantly lower than the current trading price of $11.85.
This $10.00 strike price represents a 16% discount from the current share price, with a 78% probability that the contract may expire worthless. If that occurs, the premium would yield a 0.80% return on the cash commitment, equating to an annualized return of 5.84%. The implied volatility of this put contract is recorded at 40%, closely aligning with the trailing twelve-month actual volatility of 39% based on Ford’s price over the last 250 trading days.
