GE Aerospace (Symbol: GE) has announced new options contracts available for expiration on August 21, 2023. Investors can engage in one put contract at a $290.00 strike price with a bid of $17.95. Selling this put allows an investor to commit to buy shares at $290.00, effectively reducing the cost basis to $272.05, compared to the current trading price of $295.83 per share. This put option is out-of-the-money by approximately 2%, with a 60% chance of expiring worthless, potentially yielding a return of 6.19% on cash commitment, equating to a 22.37% annualized yield.
On the calls side, a contract at the $300.00 strike price is currently bidding at $22.35. If shares are purchased at $295.83 and the call is sold, an investor commits to sell at $300.00, which could lead to an 8.96% return if exercised. This call option has a 46% chance of expiring worthless, which would allow the investor to retain both the shares and the premium, potentially yielding a 7.56% return or 27.30% annualized.
Implied volatility for both the put and call contracts is approximately 39%, while the trailing twelve-month volatility is calculated at 31%.
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