Options Unveiled for MSFT
Microsoft Corporation investors witnessed the kickoff of new options trading for the May 31st expiration. Stock Options Channel delved into the MSFT options chain to pinpoint one put and one call contract rousing distinct interest.
Profit Potential Through Put Contracts
The $420.00 strike put contract beckons with a $12.25 bid, enticing investors keen on buying MSFT shares. By selling-to-open this put contract, investors commit to acquiring the stock at $420.00 while adding the premium. This results in a cost basis of $407.75. Standing apart from the current $424.30/share figure, the $420.00 strike opens doors to potential returns with a 58% likelihood of expiry yielding no value.
YieldBoost: A Silver Lining
Analytical data hints at a 2.92% return on cash investment, equivalent to a 21.29% annualized yield through the put contract. Stock Options Channel tracks these odds dynamically, projecting a lucrative opportunity for investors eyeing MSFT.
Leveraging Call Contracts for Gains
On the calls side, the $430.00 strike call contract boasts a $13.05 bid. Investors seizing MSFT shares at $424.30/share and selling-to-open this call contract as a “covered call” engage in selling the stock at $430.00, allowing a potential 4.42% return at the May 31st expiration. However, tremendous upside awaits if MSFT shares rally, challenging investors to strike a balance between potential gains and security.
The Protective Power of Covered Calls
While the covered call contract may expire worthless, holding both shares of stock and collected premiums remains a viable option for investors. A 52% chance of expiry adds an additional 3.08% return, or a 22.45% annualized yield boost – a strategy deemed crucial for investors navigating MSFT’s shifting dynamics.
Volatility Insights
Implied volatility rings in at 26% for put contracts and 25% for call contracts, contrasting with the trailing twelve-month volatility set at 22%. This nuanced interplay presents a rich tapestry for investors to navigate through MSFT’s options arena, emphasizing prudence and astuteness for optimal returns.
For more insights into profitable put and call options contracts, delve into 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.
