Exploring New Territory with SIRI Options
Investors delving into Sirius XM Holdings Inc (Symbol: SIRI) encountered a fresh wave of opportunities today as new options surfaced for the May 31st expiration. Stepping into the complex realm of options trading, enthusiasts using Stock Options Channel’s YieldBoost formula scrutinized the SIRI options chain, pinpointing a call contract at the $3.50 strike price.
Uncovering Hidden Gems
This unique call contract, nestled at the $3.50 strike with a bid of 5 cents, beckons investors. A strategic move would involve purchasing SIRI shares at the current $3.37/share price, followed by the sale-to-open of the call contract, creating a “covered call.” This commitment binds the investor to sell the stock at $3.50, thereby orchestrating a tantalizing total return (excluding dividends) of 5.34% if the shares are called away at the May 31st expiration. While the premium sweetens the deal, caution whispers about missed opportunities should SIRI stock ascend rapidly.
Riding the Waves of History
Venturing into historical waters, tracing Sirius XM Holdings Inc’s trading journey over the past twelve months anchors decisions. Examining this odyssey alongside business fundamentals is indispensable. A visual companion, a chart illustrating SIRI’s trading history, prominently features the $3.50 strike in vivid red, offering a stark reminder of past shifts and future potentials.
Embracing Uncertainty
Calculations reveal that the $3.50 strike wields power, encapsulating an approximate 4% premium to the prevailing stock price – a tantalizing out-of-the-money allure. The covered call dance may end in worthlessness, granting the investor both their stock shares and the accrued premium. Analytical data unveils a 33% probability of this outcome. Stock Options Channel stands vigilant, tracking these odds diligently and promising insights into the option’s trajectory. Should the contract falter into oblivion, the premium serves as a 1.48% bonus, translating to a 10.83% annualized yield boost.
Capturing Volatility and Opportunity
Implied volatility, wielding influence at 67%, weaves an intricate web of uncertainty around the call contract. Meanwhile, the actual trailing twelve-month volatility, rooted in the last 251 trading days concluding with today’s $3.37 price tag, stands strong at 62%. For those seeking a mosaic of put and call option concepts, a visit to StockOptionsChannel.com might unearth a treasure trove of ideas.
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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.
