Investors Delight as October 18th Options Now Available for Comerica
Comerica, Inc. (Symbol: CMA) investors received a significant boost today with the introduction of new options slated for the October 18th expiration. These options, which hold 246 days until expiration, could potentially provide a lucrative opportunity for sellers of puts or calls to command a higher premium compared to contracts with a closer expiration.
Put Contracts: An Alluring Proposition
One of the intriguing options is the put contract at the $47.50 strike price, currently commanding a bid of $4.70. For investors eyeing a position in CMA shares, selling-to-open this put contract would entail acquiring the stock at $47.50, while also pocketing the premium, effectively putting the cost basis of the shares at a tantalizing $42.80 (prior to broker commissions). This alternative cost may prove more compelling than the existing $51.16/share price.
By offering an approximate 7% discount to the current trading price of the stock, the $47.50 strike presents the possibility of the put contract expiring worthless. The current data indicates a 99% likelihood of this outcome, with potential returns of 9.89% on the cash commitment, or 14.68% annualized.
Call Contracts: An Opportunity for Optimistic Investors
On the calls side, the call contract at the $52.50 strike price is making waves with a current bid of $5.60. For those who purchase CMA shares at the current price of $51.16/share and sell-to-open this call contract as a “covered call,” the commitment lies in selling the stock at $52.50. This maneuver, combined with the premium collection, could yield a total return of 13.57% if the stock is called away at the October 18th expiration, prior to broker commissions. However, the trailing twelve month trading history and business fundamentals must not be overlooked as these play a pivotal role in decision-making.
The $52.50 strike offers an approximate 3% premium to the current trading price, potentially resulting in the call contract expiring worthless. The current analytics unveil a 99% chance of this eventuality, with potential returns of a 10.95% boost in extra return for the investor, or 16.24% annualized, referred to as the YieldBoost.
A Calculated Perspective
Considering the actual trailing twelve month volatility to be 63%, investors can explore further put and call options contract ideas by visiting StockOptionsChannel.com.
Also see:
RGC Videos
OFLX shares outstanding history
Funds Holding EOC
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
