Investors in Canadian Imperial Bank Of Commerce (CIBC) in Toronto, Ontario, saw new options begin trading today for the July 17th expiration, with 84 days remaining until expiration. Notably, a put contract at a $105.00 strike price has a current bid of $1.05, which may allow buyers to lower their cost basis to $103.95 if executed. This represents a 3% discount to the current share price of $108.62, with a 64% chance that the put will expire worthless, providing a potential return of 1.00%, or 4.35% annualized.
Additionally, a call contract at a $110.00 strike price has a bid of $1.75. If an investor purchases shares at the current price and sells the call, they could see a total return of 2.88% if the stock gets called at expiration. The odds of this call expiring worthless are calculated at 53%, allowing the investor to keep both shares and premium, representing a potential 1.61% boost to returns, or 7.00% annualized.
Implied volatility for the put contract is 23%, while for the call, it is 22%. CIBC’s trailing twelve-month actual volatility is reported at 17%.
