Investors in Brookfield Corp (Symbol: BN) saw new options trading begin on June 18, 2023. The options include a put contract with a $38.00 strike price, currently bid at $0.65, requiring an investor to purchase shares at that price. This represents a 4% discount from the current trading price of $39.39. The odds of the put expiring worthless are estimated at 63%, potentially yielding a 1.71% return on cash commitment, or 7.52% annualized.
On the calls side, a $40.00 strike call option is priced at $1.10, representing a 2% premium over the current share price. If exercised at expiration, this would yield a total return of 4.34%. The likelihood of this call expiring worthless stands at 48%, which would allow the investor to retain both the shares and premium, boosting returns by 2.79% or 12.28% annualized.
Current implied volatilities for the put and call contracts are 41% and 37%, respectively, while the actual trailing twelve-month volatility is calculated at 33%.
