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Exploring Options for Zoom Video Communications Inc. Unlocking the World of ZM Options for Investors

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    Unlocking the World of ZM Options for Investors

When trading options, investors need to keep a keen eye on the expiration dates. This is especially true for those considering options for Zoom Video Communications Inc (Symbol: ZM) with the latest options available for the July 19th expiration. The newly available contracts, with a 150-day horizon, offer a potential opportunity for sellers of puts or calls to capitalize on higher premiums than those available for contracts with a nearer expiration date. Intriguing, isn’t it?

Exploring the Put Options

Let’s take a closer look at the put contract with a $60.00 strike price, featuring a current bid of $5.10. Selling this put contract means committing to purchase the stock at $60.00 while collecting the premium, effectively putting the cost basis of the shares at $54.90. For potential buyers, this presents an attractive alternative to the current price, doesn’t it?

This $60.00 strike price represents a roughly 2% discount to the stock’s current trading price, implying a 99% possibility of the put contract expiring worthless. Voila! When it comes to strategy, the premium offers a 8.50% return on the cash commitment, equivalent to a 20.69% annualized return, also known as the YieldBoost. Quite a sweet deal, isn’t it?

Observed below is a chart displaying the trailing twelve-month trading history for Zoom Video Communications Inc, highlighting in green where the $60.00 strike is positioned.

Zoom Video Communications Inc Chart at $60.00 Strike Price

Considering the Call Options

Now let’s shift our focus to the calls side of the option chain. The call contract at the $65.00 strike price has a current bid of $5.05. If an investor decides to purchase shares of ZM stock at the current $60.95/share level and then sell-to-open that call contract as a “covered call,” they are committing to sell the stock at $65.00. With the potential to yield a total return of 14.93% if the stock gets called away at the July 19th expiration, excluding dividends, it’s an option to seriously consider. However, there’s a catch—pending a soaring performance, of course.

The $65.00 strike represents an approximately 7% premium to the current trading price of the stock, with a 99% chance of the covered call contract expiring worthless. Here’s where the premium could represent an 8.29% boost of extra return to the investor, or a 20.17% annualized return, also known as the YieldBoost. A risk worth taking or a missed opportunity?

Delve into the calculated actual trailing twelve-month volatility, estimated at 32%. For more put and call options contract ideas worth considering, a visit to StockOptionsChannel.com is worth your time.

Insight and Perspectives

Exploring options can be lucrative, but it comes with its fair share of risks. As always, it’s essential for investors to exercise caution and conduct thorough research before diving into the options game. At the end of the day, knowledge is power, and informed decisions reign supreme in the world of options trading.

Also see:
  • Stocks Conducting Buybacks That Hedge Funds Are Buying
  • MOTG shares outstanding history
  • GST Options Chain

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.