New Options Play Unfolds
Traders delving into the world of McKesson Corp (Symbol: MCK) were met with a tapestry of new possibilities today as options for the June 2025 expiration commenced trading. With these contracts offering a tantalizing 483 days until expiry, the allure of the distinctly vivacious time value dances alluringly. This fresh quandary beckons put and call sellers with the promise of juicier premiums than nearer-expiry counterparts could provide. In the halls of Stock Options Channel, our adept YieldBoost formula has deftly scoured the MCK options chain, alighting upon one put and one call contract that gleam with particular intrigue.
The Allure of Put Contracts
Behold the put contract stationed at the $510.00 strike price, boasting a brisk bid of $36.00. Should an investor opt to sell-to-open this put contract, they are poised to acquire the stock at $510.00, all the while reaping the premium, thus setting the foundational cost of the shares at a modest $474.00 (pre-broker commissions). For an investor eyeing MCK shares, this presents an enticing avenue diverging from the current $515.78/share prix fixe.
Intriguing Metrics and YieldBoost
The $510.00 strike heralds an approximately 1% markdown from the prevailing trading price (akin to being out-of-the-money by that percentage), hinting at the prospect of the put contract flirting with expiration in vain. The prevailing analytical data, including greeks and implied greeks, forecasting a 99% likelihood of such an outcome. At Stock Options Channel, this tantalizing prospect of expiration sans value spells a premium translating to a 7.06% boost on the cash commitment or a tantalizing 5.33% annualized – firmly christened as the YieldBoost.
Traversing the Terrain of Call Contracts
Journeying into the call segment of the option chain, a call contract stationed at the $520.00 strike is in the limelight with a bid of $63.70. Opting to acquire MCK shares at the prevailing $515.78/share price and subsequently engaging in a “covered call” by selling-to-open this call contract, pledges the commitment to vend the stock at $520.00. Bestowed by the premium, a calculated total return surfaces, projecting a sumptuous 13.17% if the stock finds itself summoned away at the June 2025 expiry (pre-broker commissions).
The Dance of Risk and Reward
Cast your gaze upon the $520.00 strike that flaunts an approximate 1% premium to the current trading price (out-of-the-money by that percentage), unfurling the chance of the covered call contract meeting a whimper of a conclusion, ensuring the investor retains both shares and premium triumphantly. The prevalent analytical data, encompassing greeks and implied greeks, whisper of a 99% probability for such an outcome. On our very own Stock Options Channel, we shall diligently trail these odds as they evolve over time, accompanied by a chart detailing this crescendo of odds (embodied in the trading history of the option contract). Should the covered call contract vanish void of value, the premium would spark a 12.35% cherubic infusion of extra return, equivalent to a compelling 9.33% annualized – baptized by us as the YieldBoost.
Gauging Market Volatility
In the realm of actual trailing twelve-month volatility, with the illustrious last 251 trading day closings alongside today’s $515.78 ballot, registers at a tempered 20%. For a cornucopia of put and call options concepts deserving of scrutiny, a sojourn to StockOptionsChannel.com awaits.
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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.
