Investors in Altria Group Inc (MO) saw new options trading commence today for contracts expiring on June 26. A notable put contract at a $69.00 strike price has a current bid of $0.32, allowing investors to potentially purchase shares at a cost basis of $68.68—a discount to the current trading price of $69.60. The odds of this put contract expiring worthless are estimated at 54%, potentially yielding a 0.46% return on the cash commitment or 3.39% annualized.
Additionally, a call contract at the $72.00 strike price has a current bid of $0.40. If purchased shares at $69.60 are sold through this covered call, investors could realize a total return of 4.02% if the call is exercised at expiration. This call also has a 63% chance of expiring worthless, which would allow investors to keep both their shares and the premium collected, offering a potential extra return of 0.57% or 4.20% annualized. Implied volatility for the put and call contracts are 25% and 29% respectively, while the actual trailing twelve month volatility stands at 23%.
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