Toronto Dominion Bank (TD) has launched new options trading for September 18th expiration, starting today. The newly issued put contract at the $115.00 strike price has a current bid of $0.40, offering an attractive cost basis of $114.60 for investors looking to buy shares, compared to the current price of $119.74. The put represents a 4% discount to the market price and has a 70% probability of expiring worthless, potentially yielding a 1.72% annualized return.
On the call side, a $125.00 strike price contract is currently bid at $0.45. If an investor purchases TD shares at $119.74 and sells the call, they could achieve a total return of 4.77% by the contract’s expiration, assuming the stock is called away. This contract also has a 64% chance of expiring worthless, which would result in a 1.85% annualized yield from the collected premium. Implied volatility stands at 23% for the put and 20% for the call.
The current stock volatility for TD, calculated over the last 250 trading days, is 17%.
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