New Options Trading Insights for McKesson Corp Ahead of June Expiration

Investors in McKesson Corp (Symbol: MCK) observed the launch of new options today, set to expire on June 27th. Utilizing our YieldBoost formula, we analyzed the MCK options chain to highlight one intriguing put and one call contract.

Put Option Analysis

The put contract at the $690.00 strike price currently has a bid of $17.00. If an investor chooses to sell-to-open this put contract, they would commit to purchasing the stock at $690.00. Collecting the premium would reduce the effective cost basis to $673.00 per share, before commissions. This approach offers a compelling alternative for those looking to buy MCK shares at $709.73 per share today.

This $690.00 strike price represents a roughly 3% discount to the current trading price, leaving it out-of-the-money by that percentage. Current analytical data suggests a 64% chance that the put contract may expire worthless. This information, including changes over time, will be tracked and updated on our website. If the contract does expire worthless, the premium would yield a 2.46% return on the cash commitment or an annualized rate of 17.99%, which we refer to as the YieldBoost.

Chart of McKesson’s Trading History

Call Option Analysis

On the calls side, the $720.00 strike price has a current bid of $22.00. If an investor buys MCK shares at $709.73 and sells the call contract as a “covered call,” they would commit to selling the stock at $720.00. Including the premium collected, this results in a total potential return of 4.55% if the stock is called away at the June 27th expiration (excluding any dividends and before commissions). However, significant upside could be missed if MCK shares experience substantial growth, highlighting the importance of understanding both historical trading performance and the business fundamentals.

The following chart illustrates McKesson’s trading history, with the $720.00 strike highlighted in red:

The $720.00 strike mark reflects a 1% premium over the current trading price, placing it slightly out-of-the-money. This raises the possibility of the covered call contract expiring worthless, which would allow the investor to retain both their shares and the collected premium. Current analytics indicate a 52% probability of this outcome. We will also track the likelihood over time and present the findings on our website. If the covered call does expire worthless, the premium would contribute a 3.10% additional return, or an annualized 22.63%, termed as the YieldBoost.

Volatility Considerations

The implied volatility for the put contract stands at 29%, while the call contract has an implied volatility of 28%. Furthermore, the calculated actual trailing twelve-month volatility, reflecting the last 250 trading days and the current price of $709.73, is 28%. For additional options contract ideas, continue to explore our platform.

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