Investors in Amazon.com Inc (AMZN) saw new options available today with a May 6th expiration date. Notably, a put contract at the $250.00 strike price has a current bid of $7.35. If sold to open, this contract allows an investor to purchase shares at $250.00 while collecting the premium, effectively lowering the cost basis to $242.65. This represents a roughly 1% discount compared to the current trading price of $252.80. There is a 57% chance that this put contract will expire worthless.
On the call side, a contract at the $255.00 strike price is currently bid at $8.00. If investors purchase shares at $252.80 and sell this call contract, they could achieve a total return of 4.03% if the stock gets called away by May 6th. The likelihood of the covered call expiring worthless is estimated at 51%. The implied volatility for the put contract is 52%, while the call contract has an implied volatility of 48%. The actual trailing twelve-month volatility of AMZN is calculated to be 31%.
