Investors in Cummins, Inc. (CMI) can explore new option contracts expiring on July 17th, with 95 days until expiration. Notably, a put contract at a $600.00 strike price has a current bid of $34.60. By selling this put, an investor commits to buying shares at $600.00 but effectively lowers their cost basis to $565.40, representing a discount compared to the current trading price of $613.89 per share.
Conversely, a call contract at a $620.00 strike price is available with a bid of $40.10. If executed as a covered call, this would allow an investor to sell their shares at $620.00, translating to a potential total return of 7.53% if the stock is called away by expiration. The odds of both the put and call contracts expiring worthless are estimated at 59% and 48%, respectively, presenting possible returns of 5.77% and 6.53% based on the premiums collected.
