Uncovering Promising Options Contracts

For investors eyeing Tesla Inc (Symbol: TSLA), a new set of options surfaced on November 1st, marking an intriguing development. Stock Options Channel utilizes its YieldBoost methodology to scout through TSLA’s options chain for new November 1st contracts. Among them, one put and one call contract stood out for their particular allure.

The Captivating Put Option

The put contract at the $220.00 strike price stirred interest with a current bid of $15.65. By opting to sell-to-open this put contract, investors are not only obligating themselves to buy the stock at $220.00 but also stand to pocket the premium. This move slashes the cost basis of the shares to $204.35, making it a tempting alternative for those considering TSLA shares at the current $227.03/share.

A Glimpse into Historical Context

Delving deeper into the $220.00 strike price, which offers around a 3% markdown from the current stock price, this put contract dances on the outskirts of profitability. With analytics indicating a 63% chance of the contract expiring worthless, Stock Options Channel remains vigilant, tracking these odds over time. The premium could deliver a 7.11% return, equivalent to a compelling 51.93% annually, which we affectionately dub the YieldBoost.

The Alluring Call Option

Transitioning to the calls side, the call contract at the $240.00 strike price beckons with a bid of $17.90. Those who purchase TSLA shares at $227.03/share, then execute a “covered call” by selling-to-open this contract, commit to offloading the stock at $240.00. This strategic play could yield a hefty 13.60% total return (sans dividends) if the stock is called away at the November 1st expiration.

Furthermore,

Contextualizing Business Fundamentals

This call option at the $240.00 strike, carrying a roughly 6% premium over the prevailing stock price, bears the hallmark of an out-of-the-money contract. With a 51% likelihood of expiring worthless, investors could retain both their shares and the garnered premium. This scenario could amplify returns by 7.88%, equivalent to a tantalizing 57.56% annualized return — our celebrated YieldBoost concept.

Unpacking the implied volatility, the put contract showcases 65%, while the call contract reveals 64%. Meanwhile, the tangible trailing twelve-month volatility, incorporating the last 251 trading day closures alongside the current price of $227.03, stands at 54%. For a plethora of put and call options contract insights, StockOptionsChannel.com stands as a beacon of wisdom.

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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.