Investors in Dollar Tree Inc (DLTR) can explore new options contracts with a July 17th expiration. Notably, a put contract at the $105.00 strike price is currently offered at a bid of $4.90. Selling this put would allow an investor to commit to purchasing the stock at $105.00, effectively lowering their cost basis to $100.10, compared to the current trading price of $109.70.
Conversely, a call contract is available at the $145.00 strike price, currently bid at 50 cents. Should an investor purchase DLTR shares at $109.70 and sell this call as a covered call, they could achieve a total return of 32.63% if exercised, while keeping the premium if it expires worthless. Current analytics suggest a 63% chance that the put contract will expire worthless and an 85% chance for the call contract.
The implied volatility for the put is 45%, and for the call, it is 48%, against an actual trailing twelve-month volatility calculated at 37%.
