New Trading Opportunities Emerge for Humana Inc. Options
Exploring the August 2025 Put and Call Contracts
Investors in Humana Inc. (Symbol: HUM) now have new options available for trading, set to expire in August 2025. With 239 days left until expiration, these contracts offer potential for higher premiums than shorter-term options. Stock Options Channel’s YieldBoost formula has identified a notable put and call contract within the HUM options chain.
Put Contract at $235.00: A Strategic Opportunity
The put contract at a $235.00 strike price currently has a bid of $30.00. If an investor sells that contract, they agree to buy shares at $235.00. By doing so and collecting the premium, the effective purchase price drops to $205.00 per share, before broker commissions. This presents a compelling alternative to the current share price of $237.43.
This $235.00 strike price is about a 1% discount relative to the current trading price, meaning there’s a possibility the put contract could expire worthless. Current analytics estimate a 61% chance of this happening, and Stock Options Channel plans to monitor these odds, providing updates on their website. Should the contract indeed expire worthless, the premium would deliver a 12.77% return on the cash commitment, or an annualized yield of 19.50%, a figure we refer to as YieldBoost.
Analyzing HUM’s Recent Trading History
The chart below showcases Humana Inc.’s trading history over the past twelve months, highlighting the position of the $235.00 strike price:
Covered Call Potential at $250.00
On the calls side, the contract at a $250.00 strike price has a current bid of $30.80. An investor buying shares at $237.43/share and simultaneously selling this call contract would agree to sell at $250.00. Adding the premium collected, the total return, excluding any dividends, would reach 18.27% if the stock is called away by August 2025.
While the upside profit potential could be significant, it’s critical for investors to consider Humana’s recent trading history and examine the company’s fundamentals. The following chart illustrates Humana’s trading activity over the last twelve months, with the $250.00 strike marked in red:
Understanding Risk and Potential Returns
The $250.00 strike price represents about a 5% premium over the current trading price, suggesting that the call contract might also expire worthless. Current metrics indicate a 45% chance of this occurring. Stock Options Channel will keep track of these probabilities and update the charts on their website. If the covered call contract does expire worthless, the premium alone would give investors an additional 12.97% return or 19.81% annualized yield, another example of YieldBoost.
Both the put and call contracts feature an implied volatility of around 49%. However, the actual trailing twelve-month volatility, based on the last 251 trading days, stands at 42%. For additional options ideas, 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.
