New Options for Molson Coors Show Potential Trading Opportunities
Investors in Molson Coors Beverage Co (Symbol: TAP) noticed the launch of new options today, set to expire on May 16th. At Stock Options Channel, our YieldBoost formula analyzed the TAP options chain and highlighted one put and one call contract that may attract attention.
Analyzing the Put Contract
The put contract at the $57.50 strike price currently has a bid of 20 cents. If an investor sells-to-open this put contract, they commit to buy the stock at $57.50 while receiving the premium. This arrangement effectively lowers the cost basis to $57.30 per share, excluding broker commissions. For those already interested in acquiring TAP shares, this may be an appealing alternative to the current market price of $59.06.
Since the $57.50 strike represents an approximate 3% discount off the current trading price, it risks expiring worthless. Current analytical data indicates a 61% chance of this occurring. Stock Options Channel will monitor these odds over time, providing updates on their fluctuations on the contract detail page. Should the contract expire worthless, the premium collected would yield a 0.35% return on the cash commitment or an annualized 2.23%, a metric we refer to as the YieldBoost.
Visualizing Previous Trading History
Below is a chart depicting the trailing twelve-month trading history for Molson Coors Beverage Co, highlighting where the $57.50 strike price lies in relation to this history:
Examining the Call Contract
On the calls side of the options chain, a call contract with a $62.50 strike price is currently bidding at $1.05. If an investor purchases TAP shares at the current price of $59.06 and sells-to-open this call as a “covered call,” they would be agreeing to sell the stock at $62.50. Including the premium collected, this setup yields an expected return of 7.60% if the stock is called away by the May 16th expiration (before broker commissions). However, significant upside might remain unrealized if TAP shares appreciate dramatically, highlighting the importance of analyzing past trading data and business fundamentals.
Here is a chart showcasing TAP’s trailing twelve-month trading history, with the $62.50 strike clearly marked in red:
Given that the $62.50 strike represents a 6% premium over the current trading price, there is a risk that the covered call may expire worthless, allowing the investor to retain both their shares and the premium earned. Current analytical insights indicate a 67% possibility of this outcome. Our website will continue tracking these odds and publishing relevant trade histories.
If the covered call contract expires without being exercised, the premium constitutes a 1.78% increase in return for the investor, equivalent to an annualized 11.38%, also deemed a YieldBoost.
Market Volatility Insights
The implied volatility for the put contract stands at 31%, compared to 29% for the call contract. Meanwhile, we assess the actual trailing twelve-month volatility—factoring in the last 250 trading day’s closing values and the current price of $59.06—to be at 27%. For additional options contract ideas, visit Stock Options Channel.
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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.
