New Options Trading Sparks Interest in Tradeweb Markets Inc (TW)

Insights on March 21st Options Contracts

Investors in Tradeweb Markets Inc (Symbol: TW) are seeing fresh opportunities with new options that began trading this week, set to expire on March 21st. Stock Options Channel has analyzed the options chain and identified a notable put and call contract.

The put contract at the $110.00 strike price currently has a bid of 50 cents. If an investor sells-to-open this put contract, they commit to buying shares at $110.00 while collecting a premium. This arrangement effectively lowers the cost basis to $109.50 (excluding broker commissions), making it a compelling option for someone looking to buy TW shares at a lower price compared to today’s market at $130.76.

Investors should note that the $110.00 strike price offers about a 16% discount from the current stock price (meaning it is out-of-the-money by this percentage). There’s also a chance the put contract might expire worthless, with current data suggesting a 92% likelihood of this happening. Stock Options Channel plans to track these odds over time, offering updates on their website alongside a detailed chart. If the contract expires worthless, the premium would yield a return of 0.45% on the cash commitment, equating to an annualized return of 2.64%, referred to as YieldBoost.

Below is a chart depicting Tradeweb Markets Inc’s trailing twelve-month trading history, with the $110.00 strike highlighted in green:

Exploring the Call Side

Switching to the calls side, the call contract at the $160.00 strike price holds a current bid of 25 cents. An investor buying shares of TW stock at the price of $130.76 and selling-to-open this call contract would agree to sell the stock at $160.00. This approach generates a potential return of 22.55%—excluding dividends—if the stock is called away by the expiration date on March 21st. However, if TW shares rise significantly, more upside potential could be missed, underscoring the need to assess both historical trading trends and the company’s fundamentals.

Below is a chart showing TW’s trailing twelve-month trading history, with the $160.00 strike highlighted in red:

It’s important to highlight that the $160.00 strike is approximately 22% above the current price, indicating it is out-of-the-money by that percentage. Consequently, there’s a possibility that this covered call could expire worthless, allowing the investor to retain both their shares and the collected premium. Current data shows a 93% probability of this scenario occurring. Stock Options Channel will monitor these probabilities and provide updates on the contract’s trading history as well. If the covered call positions expire worthless, the premium would offer a 0.19% extra return, or 1.11% annualized, a figure also classified as YieldBoost.

The implied volatility for the put contract stands at 34%, while the call contract has an implied volatility of 29%. In contrast, the actual trailing twelve-month volatility, calculated by examining the last 251 trading days along with today’s price of $130.76, is estimated at 20%. For additional ideas on put and call options contracts, visit StockOptionsChannel.com.

Top YieldBoost Calls of the S&P 500 »

Also see:

• Hedge Fund Activity Among Individual Components
• FKWL Average Annual Return
• XRT Average Annual Return

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