New Options for Kraft Heinz Co: A Closer Look at February 2025 Contracts

Investors in Kraft Heinz Co (Symbol: KHC) can explore new options this week, particularly with contracts set to expire in February 2025. Stock Options Channel has identified two noteworthy contracts – one put and one call – that may interest potential investors.

Analyzing the Put Contract at $30.00

The put contract available at the $30.00 strike price currently has a bid of 98 cents. By selling this put contract, an investor agrees to buy KHC stock at $30.00 but also earns the premium, effectively reducing the cost basis to $29.02 (before any broker commissions). For those considering buying KHC shares, this strategy might offer a more appealing option compared to the current market price of $30.16 per share.

This $30.00 strike is about a 1% discount from today’s share price, making it out-of-the-money by that percentage. There’s also a 54% chance that the put option expires worthless, according to current analytical data, including various greeks. Stock Options Channel will continue to monitor these odds and publish updates on their website. If the option does expire worthless, the collected premium would yield a 3.27% return based on the cash commitment, equating to an annualized 18.93% return, a figure referred to as YieldBoost.

Exploring the Call Contract at $32.50

On the call options side, there’s a contract at the $32.50 strike price with a current bid of 39 cents. If an investor buys KHC shares at the current price of $30.16 and sells this call contract as a “covered call,” they are agreeing to sell the stock at $32.50. Excluding dividends, this transaction could yield a total return of 9.05% if KHC is called away by the February 2025 expiration. However, investors should be aware that significant upside could be lost if KHC shares appreciate greatly.

Looking back at KHC’s trading history (detailed in the chart below), the $32.50 strike price is highlighted in red:

Since the $32.50 strike price is approximately 8% above the current trading price, there’s a possibility that the covered call may also expire worthless, allowing the investor to retain both the stock and the premium. Current analysis indicates a 75% likelihood of this scenario. Stock Options Channel will keep a close watch on these figures and offer updates on their webpage. Should the covered call expire worthless, the collected premium would grant an additional return boost of 1.29%, or an annualized 7.49%. This too is known as YieldBoost.

Volatility Insights

In examining the options, the implied volatility for the put contract stands at 22%, while the call contract shows a volatility of 25%. In contrast, we calculated the actual trailing twelve-month volatility at 20%, using the last 251 trading days and the current price of $30.16. For further options insights, check out StockOptionsChannel.com.

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Additional Resources:

• YTD Return on Dow
• Institutional Holders of ESBK
• Hurco Cos Next Earnings Date

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