HomeMost PopularExploring Occidental Petroleum's Options Offering for November 15th Expiration

Exploring Occidental Petroleum’s Options Offering for November 15th Expiration

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Diving into the Options Market

Investors were pleasantly surprised when new options for Occidental Petroleum Corp (Symbol: OXY) began trading, specifically for the November 15th expiration date. With 246 days until expiration, these freshly available contracts present a window of opportunity for premium potential.

A Glimpse into Potential Returns

A put contract at the $50.00 strike price is currently attracting attention with a bid of 82 cents. Selling-to-open this put contract implies an obligation to purchase the stock at $50.00 while enjoying the premium, effectively lowering the cost basis of the shares. For eager OXY investors, this offers an enticing alternative to the present share price of $62.47.

Analyzing Probabilities and Returns

Given that the $50.00 strike represents a significant 20% discount to the current stock price, there is a good chance the put contract could expire without value. Analytical data indicates an 86% likelihood of this outcome. Over time, Stock Options Channel will monitor these odds, providing insight into potential returns for investors. In the event of the contract expiring at zero value, the premium reflects a 1.64% return on cash commitment or 2.43% annualized – a YieldBoost scenario.

Visualizing Trading History

A chart tracking Occidental Petroleum Corp’s twelve-month trading history showcases the $50.00 strike position relative to past performance – shedding light on the strategic potential.

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Exploring Call Options

Conversely, the call side of the option chain features the $70.00 strike price, currently bid at $2.72. By selling-to-open this call as a β€œcovered call” after purchasing OXY shares at $62.47, investors commit to selling at $70.00. This strategy promises a solid return if the stock reaches this threshold by the November 15th expiration.

Calculating Odds and Enhanced Returns

The $70.00 strike, signaling a 12% premium to the current stock price, hints at the call contract expiring without value, showcasing a 62% probability of this outcome. Stock Options Channel will closely monitor these odds, providing clarity on potential returns. Should the covered call contract conclude without value, the premium offers an additional boost of return, known as YieldBoost.

Understanding Volatility

The implied volatility for put and call contracts differs, with puts at 33% and calls at 26%. Actual twelve-month volatility, considering trading data and current stock price, stands at 24%. For further insights into lucrative options contracts, StockOptionsChannel.com is a valuable resource to explore.

nslideshowTop YieldBoost Calls of the S&P 500 Β»

Also see:

Β• Cheap Industrials Stocks
Β• MCAF Historical Stock Prices
Β• SPNEV Historical Stock Prices

The wisdom shared here represents the author’s views and opinions, not necessarily aligned with Nasdaq, Inc.’s perspectives.

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