QuantumScape Corp (Symbol: QS) commenced trading new options today, specifically for the August 8th expiration. A notable call contract at a $6.50 strike price has a current bid of 59 cents. If shares are purchased at the current price of $6.43, and the call contract is sold as a “covered call,” it could yield a total return of 10.26% if the stock gets called away at expiration.
The $6.50 strike represents a 1% premium to the current trading price and has a 39% chance of expiring worthless. If that occurs, investors would keep both their shares and the premium, resulting in a 9.18% additional return or 77.89% annualized. The implied volatility for this call contract stands at 179%, while the actual trailing twelve-month volatility is calculated at 78%.
