Kosmos Energy Ltd Introduces New Options for Investors

Potential Opportunities with June 20th Put Contracts

Investors in Kosmos Energy Ltd (Symbol: KOS) have new options available as of today, set to expire on June 20th. With 122 days remaining until expiration, these contracts could provide sellers of puts or calls the chance to earn higher premiums than those associated with options set to expire sooner. Stock Options Channel’s YieldBoost formula has analyzed the KOS options chain and pinpointed a noteworthy put contract from the June 20th offerings.

The put contract available at the $2.50 strike price has attracted attention, currently holding a bid of 5 cents. If an investor decides to sell that put contract, they agree to buy the stock at $2.50, while also collecting the premium, thereby bringing their overall cost basis down to $2.45 (excluding broker fees). This may be an appealing alternative for those interested in acquiring shares of KOS, considering the current share price of $3.13.

Notably, the $2.50 strike price reflects about a 20% discount from the stock’s current trading price, categorizing it as out-of-the-money by that percentage. There is an estimated 81% probability that the put contract will expire worthless based on available analytical data, including greeks and implied greeks. Stock Options Channel plans to monitor these odds and publish a chart on their website that details these numbers over time. Should the contract indeed expire worthless, the collected premium would yield a 2.00% return on the cash commitment—annualized, that’s a 5.99% return, a metric we refer to as YieldBoost.

Below is a chart displaying the trailing twelve-month trading history for Kosmos Energy Ltd, highlighting where the $2.50 strike price stands in relation to that history:

The implied volatility for the mentioned put contract is 56%. In contrast, our calculations indicate the actual trailing twelve-month volatility, based on the last 249 trading days as well as today’s price of $3.13, is around 53%. For additional ideas on put and call options contracts, visit StockOptionsChannel.com.

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Also see:

• Funds Holding PRG
• Institutional Holders of OLK
• Targa Resources Technical Analysis

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