Investors in CDW Corp (Symbol: CDW) witnessed new options trading on October 16, 2023. Notably, a put contract at the $100.00 strike price has a current bid of $6.20, offering a potential cost basis of $93.80 per share, which represents a 7% discount from the current trading price of $107.43. Moreover, analytical data indicates a 67% probability that this put contract could expire worthless, yielding a 6.20% return or 14.06% annualized on the cash commitment.
On the call side, a contract at the $110.00 strike is currently priced at $9.70. Should investors opt to sell this covered call after purchasing shares at $107.43, they could achieve an 11.42% total return if the stock is called away at expiration. The likelihood of this call contract expiring worthless stands at 48%, potentially providing an additional 9.03% return, or 20.47% annualized, if the contract expires worthless.
Current implied volatility for both contracts is approximately 41%. In contrast, the actual trailing twelve-month volatility is calculated at 38%.
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