New Options Trading Opportunities Emerge for Frontier Group Holdings
Analysts Spotlight ULCC’s Options Ahead of July 2025 Expiration
Investors in Frontier Group Holdings Inc (Symbol: ULCC) are now presented with new options that began trading this week, set to expire in July 2025. With 241 days remaining until expiration, these new contracts may offer sellers of puts and calls a chance to earn higher premiums compared to those with nearer expirations. The YieldBoost formula from Stock Options Channel has identified notable put and call contracts within the ULCC options chain.
The put contract at the $5.00 strike price currently has a bid of 95 cents. Selling this put contract means an investor agrees to buy the stock at $5.00, while also collecting the premium. This effectively lowers the cost basis of the shares to $4.05 (before any transaction fees). For investors looking to buy ULCC shares, this alternative may be more appealing than purchasing at the current price of $5.46 per share.
The $5.00 strike is about an 8% discount off the stock’s current price, suggesting it’s out-of-the-money by that amount. There’s a possibility that this put contract may expire worthless, and current analytics indicate a 70% chance of that happening. Stock Options Channel plans to monitor these odds and provide updates over time, making this information accessible on our website’s contract detail page. If the contract expires worthless, the premium could yield a 19.00% return on the cash commitment, or 28.78% when annualized—referred to as the YieldBoost.
Below is a chart displaying the trailing twelve-month trading history for Frontier Group Holdings Inc, with the $5.00 strike position highlighted:
Exploring Calls: Potential Returns with Covered Calls on ULCC
The call contract at the $6.00 strike price currently offers a bid of $1.20. For an investor buying ULCC shares at the current price of $5.46, selling this call contract as a “covered call” means they commit to selling the stock at $6.00. Adding in the premium collected leads to a potential total return of 31.87% if the shares are called away by the July 2025 expiration (excluding any dividends). However, substantial upside may be sacrificed if ULCC shares rise significantly, making it essential to evaluate past performance and company fundamentals.
Here’s the chart showing ULCC’s trailing twelve-month trading history, with the $6.00 strike highlighted:
The $6.00 strike represents about a 10% premium over the current trading price, which means the call contract could also expire worthless. In this scenario, the investor retains both the shares and the collected premium. Current analysis suggests a 41% chance of this occurring. Stock Options Channel will track the change in odds over time, with updates on their website. If the covered call contract expires worthless, the premium could represent a 21.98% boost in return for the investor, or 33.29% when annualized—again referred to as the YieldBoost.
The implied volatility for the put contract stands at 80%, while the call contract has an implied volatility of 76%. In contrast, the actual trailing twelve-month volatility, based on the last 251 trading days and the current $5.46 price, is computed at 74%. For additional insights on put and call options, visit StockOptionsChannel.com.
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Also see:
- Top Ten Hedge Funds Holding PRAE
- BRZE Insider Buying
- WGP Shares Outstanding History
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
