New Investment Options for East West Bancorp, Inc. Investors
Options traders can explore fresh opportunities with East West Bancorp, Inc (Symbol: EWBC) as new contracts are released this week, specifically set for expiration on December 20th. Stock Options Channel has analyzed the EWBC options chain and spotted noteworthy put and call contracts.
The put contract at the $85.00 strike price currently has a bid of 60 cents. If an investor sells this put to open, they commit to buy the stock at $85.00 but will first collect the premium. This effectively lowers the cost basis to $84.40 (excluding broker fees). For those looking to buy EWBC shares, this could be a more appealing option compared to buying at today’s market price of $89.08.
The $85.00 strike price reflects about a 5% discount to the current trading price, meaning there’s a chance the put option may expire worthless. Current data indicates there’s a 67% chance of this occurring. Tracking will continue on Stock Options Channel’s website, where a detailed chart will show how these odds fluctuate over time. Should the contract expire without being exercised, the premium would yield a return of 0.71% on the cash outlay, which annualizes to 4.36% — a figure Stock Options Channel refers to as the YieldBoost.
Call Option Insights: Unlocked Profit Potential
On the side of calls, a contract at the $90.00 strike price currently has a bid of $3.70. An investor could purchase EWBC stock at its current price of $89.08 and then sell-to-open this call option, agreeing to sell the stock at $90.00. If the stock is called away by the expiration date, this strategy would yield a total return of 5.19% (excluding any dividends), notable especially if investor commissions are considered. However, it’s worth noting that significant price increases for EWBC shares could mean lost upside potential.
Examining the stock’s performance over the past twelve months becomes critical here. The $90.00 strike price represents a scant 1% premium to the current trading value, illustrating the possibility of the covered call expiring worthless. Present analytics show that there’s a 49% likelihood of this scenario occurring, with tracking available on Stock Options Channel’s website. Should the covered call expire worthless, the premium would provide an additional 4.15% while annualizing to 25.68% as our YieldBoost.
Volatility Insights: Understanding Market Movement
The implied volatility for the put contract stands at 33%, while the call option exhibits an implied volatility of 37%. In contrast, the actual trailing twelve-month volatility, which reflects the closing values from the last 251 trading days alongside today’s price of $89.08, is calculated at 28%. For more potential trading strategies, check out StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
Additional Resources:
- CVX Dividend History
- EUM Market Cap History
- Top Ten Hedge Funds Holding EAC
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
