New Horizons Unfolding
Investors in AbbVie Inc (Symbol: ABBV) were greeted with a new chapter today as options for the May 31st expiration commenced trading. Cast in the limelight by Stock Options Channel, the dynamic YieldBoost formula meticulously combed through the ABBV options chain, unveiling a put and call contract with tantalizing allure.
An Analytical Outlook
Nestled at the $165.00 strike price, the put contract beckoned with a beguiling bid of $4.75. Should an investor dare to step into the fray by selling-to-open, a commitment to acquire the stock at $165.00 takes center stage. However, amidst the transactional dance, a silver lining emerges – a premium to be claimed, setting the cost basis of the shares at a sweet $160.25 (prior to broker commissions). For the discerning investor eyeing ABBV shares, this presents a savory alternative to the current $167.42/share fare.
Could this be the conjuring of a profitable venture? As the $165.00 strike point winks with an ephemeral 1% discount to the stock’s prevailing trading price, the possibility emerges that the put contract might vanish into the wind. Statistics whisper that the chances of this occurrence stand at a robust 60%. As the clock ticks, Stock Options Channel will diligently track the odds, painting a visual tapestry of these numbers on their website. Should the contract dissolve into the ether, the premium would metamorphose into a 2.88% return or a tantalizing 21.02% annually – a phenomenon christened by Stock Options Channel as the YieldBoost.
Tracing the Charted Waters
Behold, a tapestry of history unfolds – a chart showcasing the trailing twelve months of trading rhythm for AbbVie Inc. Behold a green-highlighted path leading to the $165.00 strike, a beacon in the tempest-tossed realm of stocks.
Venturing to the calls domain, a call contract perches at the coveted $170.00 strike, sporting a bid of $4.25. Envision an investor acquiring ABBV shares at the current $167.42/share and then venturing forth to sell-to-open the call contract – a maneuver known as the “covered call.” This intricate dance commits the call seller to tender the stock at $170.00. As the curtain falls on this performance, a 4.08% total return (discounting dividends) waits in the wings if the stock undergoes a rite of passage at the May 31st expiration (prior to broker commissions). Yet, amidst this grand spectacle, the specter of missed opportunity hovers – should ABBV shares soar to unforeseen heights. Thus, delving into ABBV’s trailing twelve months of trading spectacle and unearthing the core business fundamentals become artforms worthy of exploration. Witness a chart adorned with red, showcasing ABBV’s saga, with the $170.00 strike gleaming as a beacon of possibilities.
Could this covered call contract unveil new avenues of prosperity? The $170.00 strike flaunts a precarious 2% premium over the present trading price, dangling the specter of possibility. As the odds of the contract fading into oblivion pirouette at 53%, Stock Options Channel stands vigilant – tracing the metamorphosis of these odds on their website, culminating in a visual tapestry of enlightenment. Should the covered call contract fade into the mist, the premium transmutes into a 2.54% boost of returns, or a tantalizing 18.53% annually – a phenomenon christened by Stock Options Channel as the YieldBoost.
Varied worlds of implied volatilities unfold before us – 29% in the put contract’s realm and 21% within the call contract’s domain. Meanwhile, a tapestry of actual trailing twelve-month volatility, incorporating the closing values of the past 251 trading days alongside the current $167.42 price, paints a vivid picture at 20%. For a treasure trove of put and call options contract ideas awaiting discovery, the voyager is beckoned to set sail to StockOptionsChannel.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
