New Opportunities Unveiled by Microsoft Corporation Options Chain
Investors in Microsoft Corporation (MSFT) find themselves at a crossroads with the unveiling of new options available for the January 2025 expiration. With 329 days remaining until expiration, these fresh contracts offer a unique opportunity for sellers in the options trading arena due to the allure of time value. These contracts may provide a chance for sellers to garner a premium higher than that of contracts with a closer expiration date. At Stock Options Channel, our YieldBoost formula meticulously combs through the MSFT options chain and singles out one put and one call contract that stand out from the pack.
The Fascinating World of Put Contracts
The $410.00 strike put contract, with a current bid of $29.45, presents an intriguing prospect for investors looking to dip their toes into the options market. By selling-to-open this put contract, investors commit to acquiring the stock at $410.00, all while pocketing the premium. This move effectively sets the cost basis of the shares at $380.55 (minus broker commissions). For savvy investors eyeing MSFT shares, this could serve as a compelling alternative compared to the current trading price of $413.00 per share.
Does the $410.00 strike put option, representing a 1% discount to the current stock price, have the potential to expire worthless? The numbers hint at a 60% chance, but these odds remain fluid. Stock Options Channel diligently tracks and analyzes these probabilities over time, offering a comprehensive chart for reference. Should the put contract fizzle out, the premium equates to a 7.18% return on the cash commitment or 7.97% annualized – our team lovingly dubs this the YieldBoost.
Exploring the World of Call Contracts
Shifting focus to the calls side of the option chain, the $445.00 strike call contract comes into view with a current bid of $31.45. An investor diving in at the current share price of $413.00 and opting to sell-to-open this call contract in a “covered call” scenario commits to selling the stock at $445.00. This strategic maneuver, coupled with collecting the premium, promises a total return of 15.36% if the stock gets called away at the January 2025 expiration (excluding dividends and broker commissions). However, the possibility of missing out on potential future gains looms large if MSFT shares skyrocket. Understanding the trailing twelve-month trading history of Microsoft Corporation and delving into its core business fundamentals becomes paramount.
At an approximate 8% premium to the existing trading price, the $445.00 strike call option could also face expiration without value, leaving investors with both their shares and the collected premium intact. According to current analytical data, there’s a 52% chance of this outcome. Stock Options Channel keeps a vigilant eye on these odds, providing regular updates and charts for investor reference. Should the covered call contract whittle away to nothing, the premium would translate into a 7.62% bonus return or 8.45% annualized – tagged affectionately as the YieldBoost.
A Peek Into Volatility
The implied volatility stands at 27% for the put contract and 23% for the call contract. Meanwhile, the actual trailing twelve-month volatility, factoring in the last 251 trading day closing values alongside today’s price of $413.00, hovers around 23%. For a plethora of intriguing put and call options contract ideas, don’t hesitate to explore StockOptionsChannel.com.
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The insights shared here are the author’s personal perspectives and do not necessarily align with those of Nasdaq, Inc.
