New Options Unveiled for Investors
Investors treading in the realm of LyondellBasell Industries NV (Symbol: LYB) witnessed the unfolding of fresh options this week, set to reach maturity on May 17th. At Stock Options Channel, our YieldBoost formula embarked on a journey, scouring the LYB options chain for these nascent May 17th contracts. Among the multitude, a particular put and call contract caught our discerning eye.
Diving into the Put Contract
The put contract nestled at the $90.00 strike price stands with a current bid of 50 cents. Opting to sell-to-open this put contract, an investor intertwines their fate with the stock at $90.00, yet also garners the premium, cascading the cost basis of the shares to a reduced $89.50 (pre-broker commissions). For an investor already eyeing LYB shares, this maneuver might sparkle as an enticing deviation from the prevailing $100.43/share tab.
The Call Contract Unveiled
Venturing into the land of calls, the $105.00 strike price emerges with a current bid of $1.55. Envisioning an investor who snaps up LYB shares at the current $100.43/share juncture and subsequently offloads that call contract as a “covered call,” they pledge to dispatch the stock at $105.00. As the call seller sips from the premium chalice, a sumptuous total return (sans dividends) of 6.09% beckons if the stock dances away at the May 17th expiration (pre-broker commissions). Of course, the specter of forsaken upside lingers if LYB shares jet off to the stratosphere. Peering at LYB’s saw-toothed trading history across the twelve-month epoch, with the $105.00 strike bedecked in red, gains gravitas.
Treading the Analytical Landscape
Meandering through the labyrinthine realm of analytics, it’s noted that the $90.00 put contract lounges in this out-of-the-money alcove by an approximate 10% edge to the prevailing stock quote. Data whispers that the odds of this put contract drifting into the abyss rest at a stately 88%. Conversely, the $105.00 call contract languishes as an out-of-the-money treasure by roughly 5%, with a 69% chance divined for it to spiral into naught. These statistics, adorned with the alchemy of greeks and implied greeks, stand testament to the ebbs and flows of chance in the mystic land of options.
Immersing in Volatility and Prognostications
The put realm shivers with an implied volatility of 23%, whilst the call cosmos gleams with 21%. Engulfed in the practical cocoon of actual trailing twelve-month volatility, emboldened by 251 closing days of trades interwoven with the $100.43 today, stands at a majestic 21%. This profusion of metrics and mystique orchestrates a symphony of choice for investors to waltz through the realm of put and call options, ripe with possibilities.
In Conclusion
As the financial sun sets on this expedition into the abyss of LYB put and call options, it beckons with a siren call to the intrepid investor. With a quiver full of strategies, each with its unique allure, the options market pulsates with potential. For those daring souls seeking to plumb the depths of financial innovation and risk, the May 17th horizon gleams with promise, for in the volatile galaxy of trading, fortune favors the audacious.
