New options for Halliburton Company (Symbol: HAL) have been made available today for the November 21st expiration, with 101 days until that date. A put contract at a $19.00 strike price has a current bid of 85 cents, allowing sellers to potentially purchase HAL shares at this price, reducing the effective cost basis to $18.15, representing about a 10% discount to the current trading price of $21.07. The implied odds of the put contract expiring worthless are 69%, offering a potential return of 4.47% on the cash commitment, or 16.16% annualized.
Additionally, a call contract at a $22.00 strike price is currently offered at a bid of $1.06. If an investor buys shares at $21.07 and sells this call, they would be committing to sell at $22.00, resulting in a total expected return of 9.44% if the shares are called away by the expiration date. There is a 52% chance the call could expire worthless, allowing the investor to retain both the shares and the premium, which would yield an additional 5.03% return or 18.17% annualized.
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