Investors in Phillips 66 (Symbol: PSX) can now explore new options contracts effective June 13th. The Stock Options Channel has utilized its YieldBoost formula to analyze the PSX options chain and highlights a notable put and call contract.

Put Contract Insights

The put contract with a strike price of $103.00 currently bids at $4.10. By opting to sell-to-open this put contract, an investor would commit to purchasing the stock at $103.00 while also collecting the premium. This effectively lowers the cost basis to $98.90 per share, prior to broker fees. For those already interested in acquiring PSX shares, this could be a compelling alternative to buying at the current price of $104.78/share.

This strike price reflects an approximate 2% discount from the existing trading price, indicating that the contract is out-of-the-money. Current analytical data suggests a 59% probability that the put contract may expire worthless. The Stock Options Channel will monitor these odds and provide updated insights on their website. If the contract expires worthless, the premium represents a return of 3.98% on the cash commitment, equating to an annualized return of 33.79%, referred to as the YieldBoost.

Trading History Chart for Phillips 66

Below is a chart displaying the trailing twelve-month trading history for Phillips 66, with the $103.00 strike price marked in green:

Call Contract Considerations

Moving to the call options, the contract with a $106.00 strike price currently bids at $3.50. If an investor buys shares of PSX at $104.78/share and sells this call contract as a “covered call,” they commit to selling the stock at $106.00. This action would yield a total return of 4.50% if the stock is called away by the June 13th expiration, excluding dividends and broker fees. It’s important to note that a significant upside might be missed if PSX shares increase substantially, which is why analyzing the trading history and fundamentals of Phillips 66 is essential.

Below is a chart showing PSX’s trailing twelve-month trading history, with the $106.00 strike price indicated in red:

The $106.00 strike represents about a 1% premium over the current trading price, meaning it is also out-of-the-money. There is a 50% chance that the covered call could expire worthless, which would allow the investor to retain both their shares and the premium collected. The premium from this scenario would provide a 3.34% additional return, or 28.35% annualized, categorized as a YieldBoost.

Volatility Insights

Implied volatility for the put contract is 39%, while for the call contract it is 37%. The actual trailing twelve-month volatility, calculated using the last 250 trading day closing values along with today’s price of $104.78, stands at 34%.

For additional put and call options contract ideas, visit StockOptionsChannel.com.