Investors in Phillips 66 (PSX) can now explore new options with a November 2027 expiration, presenting potential opportunities for higher premiums due to the 480 days until expiry. Notably, the put option at a $200.00 strike price offers a current bid of $26.00, allowing investors to potentially acquire shares at an effective cost basis of $174.00, compared to the current trading price of $205.54. This put option carries a 64% chance of expiring worthless, offering a potential 13.00% return on the cash commitment, or 9.88% annualized.
On the call side, the $220.00 strike call option is currently bid at $28.30. Investors purchasing shares at $205.54 and selling this call as a covered call could achieve a total return of 20.80% if exercised at expiration. There is a 48% likelihood that this call will expire worthless, which would still afford investors a 13.77% additional return, or 10.47% annualized, from the premium.
The implied volatility for the put and call options is 36% and 37%, respectively, while the actual trailing twelve-month volatility for Phillips 66 stands at 30%.
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