On July 15th, 2023, Microsoft Corporation (MSFT) introduced new options trading, notably a put contract at a $365.00 strike price with a current bid of $6.55. Selling this put contract allows investors to acquire shares at an effective cost basis of $358.45 per share, which represents a 2% discount compared to the current trading price of $371.44. Analysts estimate a 60% chance that the put contract could expire worthless, potentially yielding a return of 1.79%, or 43.67% annualized.
Additionally, a call contract at the $375.00 strike price is currently priced at $8.10. Selling this call as a covered call while purchasing shares at $371.44 represents a total return of 3.14% if exercised by the expiration date. The possibility of the call contract expiring worthless stands at 55%, which could provide a 2.18% additional return or 53.06% annualized.
Overall, these trading options reflect current market sentiments, with the implied volatility for the put at 33% and the call at 36%, while the trailing annual volatility is calculated at 27%.
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