Investors in STMicroelectronics NV (NASDAQ: STM) can now trade options set to expire on September 4. Notably, a put contract at the $54.00 strike price has a current bid of $3.40, allowing investors to purchase shares effectively at $50.60. This represents approximately a 2% discount from the current trading price of $55.35 per share.
Additionally, a call contract at the $66.00 strike price is available with a bid of $0.75. If an investor sells this call as a covered call after purchasing shares at $55.35, they could see a potential total return of 20.60% if the stock is called away by the expiration date. Current odds suggest a 70% chance this contract may expire worthless, allowing the investor to retain both their shares and the premium.
The implied volatility for the put contract is 76%, while the call contract shows 79%. In comparison, the actual trailing twelve-month volatility stands at 57%.
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