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Exploring Intriguing Opportunities in Host Hotels & Resorts Inc Options

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Exploring Intriguing Opportunities in Host Hotels & Resorts Inc Options

Discovering Potential in HST Options

Investors eyeing Host Hotels & Resorts Inc (HST) have new options awaiting them this week, with the May 17th expiration date drawing near. At Stock Options Channel, we’ve delved into the HST options chain for these fresh May 17th contracts and pinpointed a put and call contract that stand out from the crowd.

The Intriguing Put Option

One particular put contract at the $20.00 strike price is garnering attention, sporting a bid of 40 cents. Should an investor opt to sell-to-open this put contract, they commit to acquiring the stock at $20.00, while pocketing the premium. This move effectively sets the cost basis of the shares at $19.60, presenting an enticing alternative to the current price of $20.61 per share for potential HST buyers.

While the $20.00 strike lies 3% below the prevailing stock price, implying that the put contract is out-of-the-money by that percentage, there exists a 65% chance that the contract could expire worthless. Stock Options Channel will monitor this probability over time, offering insights on potential outcomes. In the case of expiration without value, the premium equates to a 2.00% return on the cash committed, or 15.87% annualized, christened as the ‘YieldBoost.’

Uncovering the Call Option Opportunity

Conversely, on the calls side, the call contract at the $21.00 strike price has a bid of 55 cents. Purchasing HST shares at the current price of $20.61 and selling-to-open the call contract at $21.00, under the ‘covered call’ strategy, commits the investor to sell the stock at the upper price limit. Through this maneuver, a total return of 4.56% awaits if the stock gets called away at the May 17th expiration, minus dividends, if any.

The $21.00 strike holds a 2% premium over the existing stock price, suggesting an out-of-the-money scenario by that margin, with a 55% probability of the covered call contract expiring valueless. Should this occur, the investor retains both stock shares and the premium, resulting in a 2.67% supplementary return, or 21.17% annualized, known as the ‘YieldBoost.’

Comparing Volatility Metrics

The put contract displays an implied volatility of 28%, while the call contract features 26%. A different narrative unfolds when considering the trailing twelve month volatility, calculated at 25% based on previous 249 trading day closures and today’s $20.61 share price. For further exploration of put and call options, StockOptionsChannel.com stands as a valuable resource.

Top YieldBoost Calls of the REITs »

Further Insights:

• Historical Market Cap of ASRT
• Examination of GINN Options Chain
• Price Target Analysis for FFG

The insights and perspectives shared here are attributed to the author and may not necessarily align with those of Nasdaq, Inc.