Investors in Devon Energy Corp. (NYSE: DVN) saw new options available today for a September 4th expiration. Notably, a put contract at the $45.00 strike price has a current bid of 8 cents, allowing investors willing to sell-to-open to purchase shares at that price while collecting a premium, effectively lowering their cost basis to $44.92. This represents an approximate 2% discount to the current trading price of $45.99.
On the call side, a contract at the $47.00 strike price has a bid of $1.14. By purchasing shares at $45.99 and selling this call as a covered call, investors could see a total return of 4.67% if the stock is called away at expiration. The odds that the put contract may expire worthless stands at 59%, while the covered call has a 53% chance of expiring without being exercised.
The implied volatility for the put contract is 40%, and 45% for the call contract. The actual trailing twelve-month volatility is calculated at 34%, based on the last 251 trading days.
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