Investors in Microsoft Corporation (MSFT) have new options available for trading with an expiration date of October 16, 2023. The put contract at the $395 strike price has a current bid of $33.15, allowing investors to effectively lower their purchasing cost to $361.85 if they commit to buying the stock. This represents an approximate 1% discount from the current trading price of $397.86, with a 59% chance that the put contract may expire worthless. If it does, the premium reflects an 8.39% return on the cash commitment, or 12.87% annualized.
Additionally, a call contract at the $410 strike price has a bid of $35.70. Selling this as a covered call while holding MSFT shares at $397.86 could yield a total return of 12.02% by the expiration date. This strike price is about 3% above the current stock price, with a 47% chance that the contract will expire worthless, resulting in an 8.97% boost to returns, or 13.76% annualized.
The implied volatility for both the put and call contracts is approximately 31%, while the actual trailing twelve-month volatility is calculated at 26%.
