New Options Landscape
Investors in Vishay Intertechnology, Inc. (Symbol: VSH) greeted the dawn of October 18th with the unveiling of new options for this day of reckoning. One of the key data jewels that forms the price an option buyer is willing to pay is the time value. With 246 days until expiration, the newly laid-out contracts whisper of a potential symphony for sellers of puts or calls to reap a richer premium than that available for the contracts with a closer expiration. At Stock Options Channel, our YieldBoost formula has delved deep into the VSH options chain for the fresh October 18th contracts and unearthed one put and one call contract of particular intrigue.
Notable Put Option
The put contract at the $17.50 strike price flirts with a current bid of 10 cents. If an investor were to sell-to-open that put contract, they would be pledging to purchase the stock at $17.50. However, they would also revel in collecting the premium, thus embedding the cost basis of the shares firmly at $17.40 (prior to broker commissions). For an investor already eyeing shares of VSH, this could whisper of an alluring alternative to forking out $22.07/share in the present day.
The $17.50 strike echoes a tantalizing 21% discount to the current trading price of the stock. In other words, it playfully dances out-of-the-money by that percentage. This sows the seeds of the possibility that the put contract could fade into worthlessness. The very now analytical data, including greeks and implied greeks, insinuate that the ongoing odds of that eventuality stand at 99%. Stock Options Channel will diligently monitor these odds over time and unfurl a chart of those numbers on our website under the contract detail page for this contract. Should the contract vanish into nothingness, the premium would burgeon into a 0.57% return on the cash commitment or 0.85% annually – a rhythmic symphony we fondly call the YieldBoost.
Visual Analysis of Put Option
Below is a chart sculpting the trail of twelve months’ trading history for Vishay Intertechnology, Inc., painting in lush green where the $17.50 strike gracefully resides in relation to that history:
Captivating Call Option
On the calls side, the call contract at the $22.50 strike price winks with a current bid of 45 cents. If an investor were to gladden their heart with shares of VSH stock at the prevailing prince of $22.07/share, and then sell-to-open that call contract as a “covered call,” they would be locking in to sell the stock at $22.50. As the call vendor wraps their fingers around the premium, this waltzes into a total return (excluding dividends, if any) of 3.99% should the stock pirouette away at the October 18th expiration. Certainly, there’s the potential for ample upside to be left untapped if VSH shares embark on a celestial flight. Hence, delving into the trailing twelve months trading history for Vishay Intertechnology, Inc., and laying bare the business fundamentals becomes a pressing necessity. Here’s a record-breaking chart displaying VSH’s trailing twelve months trading history, casting the $22.50 strike in a striking shade of red:
Visual Analysis of Call Option
Considering that the $22.50 strike serenades an enchanting 2% premium to the current trading price of the stock, thus gracefully out-of-the-money by that percentage, there also exists the possibility that the covered call contract could dissolve into nothingness. Should this be the case, the investor would lay claim to both their stock shares and the symphonic premium collected. The prevailing analytical data, including greeks and implied greeks, hint that the ongoing odds of this symphony stand at 99%. Stock Options Channel will shadow these odds over time, plotting a chart of those numbers on our website under the contract detail page, while charting the trading history of the option contract. Should the covered call contract untangle into nothingness, the premium would metamorphose into a 2.04% boost of additional return to the investor, or 3.03% annually, a melody we fondly tag as the YieldBoost.
Market Volatility Insights
Meanwhile, the true trailing twelve months volatility surfaces (pondering over the last 251 trading day closing values and today’s price of $22.07) at 29%. For a kaleidoscope of other put and call options contract ideas worth gazing upon, feel free to visit StockOptionsChannel.com.
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The thoughts and sentiments showcased herein are the views and opinions of the author and do not necessarily mirror those of Nasdaq, Inc.
