Investors in Capital One Financial Corp (COF) saw new options trading commence on July 10, with significant interest in two contracts. A put contract at the $185.00 strike price currently has a bid of $5.70, effectively allowing investors to purchase share at a cost basis of $179.30 if they sell-to-open the contract. This put option is approximately 1% below the current market price of $185.99, with a 56% chance of expiring worthless.
On the call side, a contract at the $190.00 strike price carries a bid of $5.80. Should an investor purchase shares at $185.99 and opt for a covered call at this strike, they could see a total return of 5.27% if the stock is called away by expiration. This call option is about 2% higher than the current price, with a 52% chance of expiring worthless.
Implied volatility for the put and call contracts is at 34% and 35%, respectively, while actual trailing volatility is calculated at 31%.
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