New Options Available for Amazon Investors: May 2 Expiration Insights

Today, investors in Amazon.com Inc (Symbol: AMZN) can explore new options contracts scheduled to expire on May 2nd. Through our YieldBoost formula at Stock Options Channel, we examined the AMZN options chain and identified one put and one call contract worth noting.

Analyzing the $190.00 Put Contract

The put contract at a $190.00 strike price currently has a bid of $6.50. If an investor sells-to-open this contract, they are effectively committing to purchase shares at $190.00. By collecting the premium, the investor’s cost basis would drop to $183.50 (excluding broker commissions). For anyone considering buying shares of AMZN, this presents an appealing alternative to acquiring them at the current price of $195.77 per share.

Since the $190.00 strike represents an approximate 3% discount to the present trading price, there’s a possibility that this put contract may expire worthless. Current analytical data indicates a 61% chance of that occurring. The Stock Options Channel will monitor these odds and publish ongoing updates on our website under the contract detail page. If the contract does become worthless, the investor would see a 3.42% return on the cash commitment, which annualizes to approximately 24.97%. We term this as the YieldBoost.

Comparative Trading History for AMZN

Below is a chart showing Amazon’s trailing twelve-month trading history, with the $190.00 strike price marked in green:

Exploring the $200.00 Call Contract

On the calls side, there is a call contract at a $200.00 strike price currently bid at $9.50. If an investor opts to buy AMZN shares at $195.77 per share and simultaneously sells-to-open this call contract as a “covered call,” they are agreeing to sell the shares for $200.00. Including the premium, this strategy offers a total return of 7.01% if the stock is called away at expiration (prior to broker commissions). However, should AMZN shares rise significantly, investors may find upside potential compromised.

To fully understand this choice, reviewing Amazon’s trailing twelve-month trading history and examining its business fundamentals is essential. Below is a chart outlining the past trading performance, with the $200.00 strike highlighted in red:

The $200.00 strike price represents about a 2% premium over the current trading price, indicating a possibility of the covered call expiring worthless as well. Should that scenario unfold, the investor retains both their shares and the premium. Current analytics suggest a 53% chance of this happening. Yield data will be tracked over time on our website, and we will also provide historical data for the option contract. If the covered call contract expires worthless, the premium would yield a 4.85% additional return, annualized at approximately 35.42%, again referred to as the YieldBoost.

Volatility Insights

The implied volatility for the put contract stands at 39%, while the call contract reflects a 41% figure. Analyzing actual volatility based on the last 250 trading days and the current price of $195.77 reveals an actual trailing volatility of 28%. For further put and call options ideas, visit StockOptionsChannel.com.

Top YieldBoost Calls of the Nasdaq 100 »

also see:

• FSAC YTD Return
• GMTB Historical Stock Prices
• DTI YTD Return

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.