New Options for VF Corp.: What Investors Should Know

Investors in VF Corp. (Symbol: VFC) can take advantage of newly available options set to expire on December 20th. The latest data from Stock Options Channel highlights a specific call contract worth considering.

Focus on the $20.00 Call Contract

The call contract at the $20.00 strike price currently has a bid of 83 cents. If an investor buys VFC shares at the current price of $19.75 and sells this call contract as a “covered call,” they commit to selling the stock at $20.00. By doing so, the investor would secure a total return, excluding dividends, of 5.47% if the stock is called away on the expiration date (before broker commissions). Investors should be aware, however, that if VFC shares increase significantly in value, they may miss out on further gains. This makes it essential to evaluate VF Corp.’s past trading performance and business fundamentals. Below is a chart illustrating VFC’s twelve-month trading history, with the $20.00 strike marked in red:

The Risks and Rewards of Covered Calls

The $20.00 strike price represents about a 1% premium over the current trading price, meaning it is currently out-of-the-money by that percentage. There is a chance that the covered call contract could expire worthless. In that scenario, the investor would retain both the shares and the premium collected. Current analytical data indicates a 46% probability of this happening. Stock Options Channel will track these odds over time and provide updates through a chart showing the option contract’s trading history. If the covered call expires worthless, the premium collected would add a 4.20% boost to the investor’s total return, annualized at 23.95%, known as the YieldBoost.

The implied volatility of this call contract stands at 60%. In contrast, the actual trailing twelve-month volatility—based on the previous 251 trading days and today’s stock price of $19.75—is calculated at 58%. For additional options strategies, visit StockOptionsChannel.com.

Explore Top YieldBoost Calls of the S&P 500 »

Also see:

• VITL shares outstanding history
• Institutional Holders of FFIV
• Funds Holding SNH

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