Lucid Group Options Trading: Call Contracts Offer Potential Returns

Investors in Lucid Group Inc (Symbol: LCID) are observing the commencement of new options trading today, specifically for the contracts expiring on April 11th. At Stock Options Channel, our YieldBoost formula has analyzed the LCID options chain and highlighted a notable call contract.

Key Call Contract Details

The call contract at the $3.00 strike price currently offers a bid of 7 cents. If an investor purchases shares of LCID at the present price of $2.41 per share, then sells this call as a “covered call,” they would agree to sell the stock at $3.00. Including the premium from the sale, this strategy yields a total return of 27.39% if the shares are called away at the April 11th expiration (excluding any dividends and broker commissions). However, it’s important to note that if LCID shares rise significantly, the potential profits beyond the $3.00 strike may not be realized. Therefore, analyzing the company’s past trading history and fundamentals is crucial.

Below is a chart illustrating LCID’s trailing twelve-month trading history, with the $3.00 strike marked in red:

Strike Price Analysis

The $3.00 strike price indicates approximately a 24% premium over the current trading price of the stock, meaning this contract is currently out-of-the-money by that same percentage. Thus, there is a chance that the covered call contract could expire worthless. In this scenario, the investor would retain both their shares and the premium received. Current analytical data, including greeks and implied greeks, estimates a 66% probability that this outcome will occur. Our website tracks these odds over time, providing updates through a dedicated chart on the contract detail page. If the covered call expires worthless, the premium would equate to a 2.90% increase in total returns for the investor, annualized to 24.68%, which we refer to as the YieldBoost.

Volatility Insights

The implied volatility for the call contract discussed above stands at 94%. In contrast, we calculated the actual trailing twelve-month volatility—based on the last 250 trading days and the current price of $2.41—to be 76%. For additional ideas on put and call options contracts, visit Stock Options Channel.

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