On October 23, new options for Deere & Co. (Symbol: DE) began trading, with particular interest in a put contract at a $680 strike price, currently has a bid of $22.50. If sold-to-open, investors would commit to purchasing shares at this price, effectively lowering their cost basis to $657.50, compared to the current trading price of $691.78, representing an approximate 2% discount. There is a 59% chance that this option will expire worthless.
Additionally, a call contract at the $700 strike price has a current bid of $27.20. If investors purchase shares at $691.78 and sell-to-open, they could achieve a 5.12% total return if the stock is called away by the expiration. The likelihood of this call contract expiring worthless is 51%, with a potential YieldBoost of 3.93%, equating to a 28.70% annualized return.
Implied volatility for the put contract is 32%, while the call contract shows an implied volatility of 33%. The actual trailing twelve-month volatility for DE is calculated at 32%.
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