New Options Trading for Regency Centers Corp Offers Strategic Opportunities
Investors in Regency Centers Corp (Symbol: REG) have new options available for trading this week, specifically for the June 20th expiration. At Stock Options Channel, our YieldBoost formula has identified two contracts of particular interest—one put and one call—within the REG options chain.
Put Option Analysis
The put contract at the $65.00 strike price currently has a bid of 75 cents. By selling-to-open this put contract, an investor commits to purchasing the stock at $65.00. Additionally, they collect a premium, effectively reducing their cost basis for the shares to $64.25 (before broker commissions). For investors eyeing REG shares, this method could provide a more attractive entry point compared to the current price of $71.46 per share.
This $65.00 strike represents an approximate 9% discount to REG’s current trading price. As such, there is a possibility that the put contract could expire worthless. Current data, including greeks and implied greeks, suggest a 79% chance of this occurring. To track these odds over time, Stock Options Channel will monitor and publish a chart of these fluctuations on our website. Should the put contract expire worthless, the premium would yield a 1.15% return on the cash commitment, equating to a 7.02% annualized return—referred to as the YieldBoost.
Below is a chart depicting the trailing twelve-month trading history for Regency Centers Corp, with the $65.00 strike clearly marked:
Call Option Overview
On the calls side, the contract at the $75.00 strike price has a current bid of 30 cents. If an investor buys shares of REG at the current price of $71.46 and then sells-to-open this call as a “covered call,” they commit to selling the stock at $75.00. The premium collected in this case would yield a total return of approximately 5.37%, provided the stock is called away at the June 20th expiration (excluding any dividends and before broker commissions). However, this strategy can potentially leave significant upside unrealized if REG shares appreciate considerably. Thus, reviewing REG’s twelve-month trading history and business fundamentals is imperative.
Below is a chart illustrating REG’s trading history, with the $75.00 strike highlighted:
The $75.00 strike indicates about a 5% premium above the current trading price. This suggests the possibility that the covered call contract may expire worthless, allowing the investor to retain both their shares and the collected premium. Data indicates a 64% likelihood of this scenario. Stock Options Channel will also track these odds over time and provide a historical chart of the option contract. Should the covered call expire worthless, the premium contributes an additional 0.42% to the investor’s return, reflecting a 2.55% annualized yield, known as the YieldBoost.
The implied volatility for the put contract stands at 31%, while the call contract shows 29%. On the other hand, the actual trailing twelve-month volatility, accounting for the last 249 trading days and the current price of $71.46, is calculated at 20%. For further put and call options contract ideas, please visit StockOptionsChannel.com.
Top YieldBoost Calls of the REITs »
Also see:
- Top Ten Hedge Funds Holding VWTR
- Top Ten Hedge Funds Holding QLV
- Top Ten Hedge Funds Holding AMSC
The views and opinions expressed herein are solely those of the author and do not necessarily reflect those of Nasdaq, Inc.
