Investors in ManpowerGroup Inc (NYSE: MAN) can now access new options with an expiration date of October 17. Notably, a put contract with a $40.00 strike price is currently bid at $0.60. Selling this contract obligates the investor to buy shares at $40.00, effectively reducing their cost basis to $39.40, compared to the current share price of $40.64.
The $40.00 strike price offers nearly a 2% discount from the current market value, but there is a 57% probability that the put contract could expire worthless. If it does expire worthless, the premium would yield a 1.50% return on the cash commitment, equating to an annualized rate of 8.55%. The implied volatility for this put contract is 43%, matching the actual trailing twelve-month volatility.
