Today, investors have the opportunity to engage in options trading for Kilroy Realty Corp’s (Symbol: KRC) with available contracts expiring on April 19th. By leveraging the YieldBoost formula, Stock Options Channel has scoured the KRC options chain for the latest April 19th contracts, finding a put and call contract that stand out.
Potential Put Opportunity
For those eyeing the put contracts, the $22.50 strike price presents an intriguing prospect, with a current bid of 10 cents. If an investor opts to sell-to-open the put contract, they commit to acquiring the stock at $22.50 but also receive the premium, effectively setting the cost basis of the shares at $22.40 (excluding broker commissions). This offers an attractive alternative to the current market price of $35.26/share.
Given that the $22.50 strike reflects approximately a 36% discount to the existing trading price, there is a 99% potential for the put contract to expire without value. Should this occur, the premium would translate to a 0.44% return on the cash commitment, or 2.54% annualized – a metric referred to as the YieldBoost.
Unearthing Call Prospects
On the calls side, the call contract at the $45.00 strike price is gaining attention, sporting a current bid of 10 cents. If an investor acquires KRC shares at the current market price of $35.26/share and then sells-to-open the call contract (a “covered call”), they commit to selling the stock at $45.00. Factoring in the premium, this scenario could yield a total return of 27.91% at the April 19th expiration, excluding dividends, if any.
However, there is the risk of missing out on potential upside if KRC shares experience significant growth. Given that the $45.00 strike implies an approximately 28% premium to the current trading price, there is a 99% likelihood that the covered call contract could expire worthless. In this event, the investor retains their shares of stock along with the collected premium, resulting in a 0.28% boost to the return, or 1.62% annualized – termed as the YieldBoost.
Volatility and Further Options Considerations
With the current trailing twelve month volatility estimated at 43%, investors can consider exploring more put and call options contract ideas at StockOptionsChannel.com. This insight adds context to the potential opportunities and risks associated with Kilroy Realty Corp’s April 19th options.
For investors seeking a deeper understanding of these options and similar opportunities, the analysis of volatility and historical performance can further inform their decision-making process.
