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On October 4, 2023, Amazon.com Inc (AMZN) launched new options trading for contracts expiring on November 7. Notably, the $210.00 put contract currently has a bid of $5.90, offering investors a potential entry point for purchasing shares below the current trading price of $219.64. This put contract represents an approximate 4% discount, with a 68% chance of expiring worthless.
Additionally, a $230.00 call contract is available with a current bid of $6.75. Selling this call as a covered call while holding shares at $219.64 could yield a total return of 7.79% if the shares are called away at expiration. The call option has a 61% chance of expiring worthless, and should it do so, it would provide a 3.07% boost to the investor’s return, equating to 26.06% annualized.
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