Exploring Nov 15 Options for Cogent Communications Holdings (CCOI)
Investors diving into the world of Cogent Communications Holdings, Inc. (Symbol: CCOI) witnessed a remarkable event today as novices and seasoned traders alike eagerly traded new options for the upcoming November 15th expiration. The time value, a pivotal factor dictating the price potential of an option, now boasts 240 days until expiration for the fresh contracts on the table. This presents a gleaming opportunity for those dealing in puts or calls to grasp a premium higher than that of nearer-term contracts. Stock Options Channel, a beacon for option enthusiasts, has meticulously combed through the CCOI options chain, shining a light on a put and call contract worth considering.
Unearthing Opportunity: $60.00 Put Contract
Among the options beckoning investors, the put contract at the $60.00 strike price stands out with a current bid of $4.10. Venturing into this territory means committing to purchasing the stock at $60.00. However, the gleaming allure lies in collecting the premium, effectively reducing the cost basis of the shares to $55.90 (minus broker commissions). For potential buyers eyeing CCOI shares, this offer might just be the golden ticket compared to the $62.15/share rate today.
With the $60.00 strike presenting a modest 3% discount from the current trading value of the stock, the out-of-the-money appeal lingers. There exists a chance the put contract may wither away, deemed worthless at expiration. Analytical projections echo a 59% probability of this outcome. Stock Options Channel will diligently monitor this trajectory, shedding light on these odds over time. A premium elapsing into nothingness would yield a 6.83% return on cash commitment, or a sparkling 10.39% annually — christened the YieldBoost by Stock Options Channel.
Glancing at the Crystal Ball: $65.00 Call Contract
Switching gears to the calls spectrum, the call contract beckoning at the $65.00 strike price boasts a $2.60 bid. Opting for a covered call strategy entails purchasing CCOI shares at the present $62.15/share price, then parting ways with the stock at $65.00 if the call gets exercised. With the added allure of pocketing the premium, this maneuver could rake in a total return of 8.77%, unveiling a world sans dividends (commission cuts notwithstanding) should the stock be called away come November 15th. However, a skyward surge in CCOI shares may leave much to desire, underscoring the importance of scrutinizing the company’s 12-month trading history and fundamental underpinnings.
At a 5% premium to the current trading price, the $65.00 strike mirrors an out-of-the-money stance, possibly rendering the covered call contract futile upon expiration. Projections pinpoint a current 53% likelihood of this outcome. Stock Options Channel will be the guardian angel overseeing this ebb and flow, documenting the changes over time. Should the covered call contract morph into a dormant relic, the premium would serve as a 4.18% augment to the investor’s return or a tantalizing 6.36% on an annual basis — christened the YieldBoost.
The implied volatility in the put contract scenario resonates at 38%, while its call counterpart hovers at 33%. Meanwhile, the actual 12-month volatility, calculated based on the last 251 trading days and the current $62.15 price, stands at 33%. For more riveting put and call option insights, delve into StockOptionsChannel.com.
Seeking Further Horizons:
As you navigate these lucrative waters, consider exploring the vast expanse of the S&P 500’s top YieldBoost calls. For more intriguing narratives, peruse:
– KONG Videos
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The views and opinions expressed within this story belong to the author, summoning perspectives that do not necessarily echo the sentiments of Nasdaq, Inc.
