New Options Open Up for TransUnion Investors
TransUnion (Symbol: TRU) investors gained new options as of today, focusing on contracts set to expire on April 17th. Using our YieldBoost formula at Stock Options Channel, we’ve identified two standout contracts: one put and one call.
Put Contract Insights
The put contract with a $95.00 strike price currently has a bid of $2.50. An investor selling this put contract would agree to buy TRU shares at $95.00. The premium collected reduces the effective purchase price to $92.50, prior to any brokerage fees. For anyone planning to buy shares anyway, this can be an appealing alternative to today’s market price of $97.55.
This put’s strike price is about 3% below the current trading price, making it out-of-the-money by that margin. Currently, analytics indicate a 64% chance that the put might expire worthless. We will continue to monitor these odds and update them regularly on our website. If the put expires worthless, the investor could see a 2.63% return on their cash commitment, or an annualized rate of 16.57%—a figure we term the YieldBoost.
Historical Context for the Put Contract
Below is a chart representing TransUnion’s trading history over the past twelve months, highlighting where the $95.00 strike falls:
Call Contract Overview
On the flip side, the call contract with a strike price of $100.00 carries a current bid of $3.50. If an investor buys TRU shares at $97.55 and simultaneously sells this call as a covered call, they commit to selling at $100.00. If the stock is called away at expiration, this strategy could yield a total return of 6.10%, not counting dividends and before broker commissions. However, if TRU shares appreciate significantly, this setup could limit potential gains.
To assess the relevance of this trade, studying the past performance of TRU is crucial. Below is a chart showing the stock’s twelve-month trading history, with the $100.00 strike marked in red:
Key Details for the Call Contract
The $100.00 strike price reflects a 3% premium over the current trading level. There’s also a 50% likelihood that this covered call contract could expire worthless, allowing the investor to retain both the shares and the earned premium. Should that happen, the premium collected would amount to a 3.59% bonus return, or 22.60% on an annualized basis, contributing to our YieldBoost.
The implied volatility for the put contract stands at 37%, while the call contract boasts an implied volatility of 34%. In comparison, the actual twelve-month volatility, based on the last 249 trading days and the current price of $97.55, is calculated at 32%.
To explore more options contract ideas, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
Also see:
- Top Cheap Stocks
- Funds Holding ATXG
- CFRX shares outstanding history
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
