New Options Trading for Robinhood Markets Inc. Begins Today

Investors in Robinhood Markets Inc (Symbol: HOOD) are now able to engage with new options trading that began today, focusing on contracts that expire on May 2nd. At Stock Options Channel, we utilized our YieldBoost formula to analyze the HOOD options chain and identified key put and call contracts of interest.

Put Contract Details

The put contract at the $37.00 strike price currently has a bid of $1.96. Selling to open this put contract obligates the investor to purchase the stock at $37.00, while also collecting the premium, which effectively sets the cost basis at $35.04, excluding broker commissions. For investors looking to acquire shares of HOOD, this may be a desirable option compared to the current trading price of $37.34 per share.

This strike price offers about a 1% discount from the stock’s current trading value, meaning it is slightly out-of-the-money. Analytical data indicates a 58% probability that this put contract may expire worthless. To provide ongoing insights into these odds, Stock Options Channel will monitor and update this data, making it accessible on our website under the contract detail page. Should it expire worthless, the premium would yield a 5.30% return on the cash commitment, which annualizes to 38.67%. We refer to this potential gain as the YieldBoost.

Trading History Overview

Below is a chart displaying the trailing twelve-month trading history for Robinhood Markets Inc, highlighting the $37.00 strike price relative to that data.

Call Contract Details

On the call side, the contract at the $38.00 strike price has a current bid of $2.18. If an investor were to buy shares of HOOD at $37.34 and then sell to open this call contract as a “covered call,” they agree to sell the stock at $38.00. Including the premium, this would generate a total return of 7.61% (excluding dividends) if the stock is called away by the May 2nd expiration. It’s crucial to analyze both the trailing trading history and the company’s fundamentals to avoid missing potential upside if HOOD shares increase significantly.

Here’s a chart that showcases HOOD’s trading history over the past twelve months, with the $38.00 strike highlighted.

With the $38.00 strike at about a 2% premium to the current trading price, this option could also expire worthless, allowing the investor to retain their shares as well as the premium earned. Current analytics estimate a 46% chance of this scenario occurring. Stock Options Channel will continue to track these probabilities on our website, updating the metrics over time. If the covered call expires worthless, the premium would add an extra return of 5.84% or 42.62% annualized, representing another YieldBoost.

Implied Volatility and Additional Insights

The put contract’s implied volatility stands at 74%, while the call contract’s is reported at 75%. In contrast, we calculated the actual trailing twelve-month volatility—based on the last 250 trading days and today’s price of $37.34—to be at 69%. For more ideas on put and call options contracts, explore StockOptionsChannel.com.

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Also see:

• Stock Buybacks
• Institutional Holders of CEN
• SEG Options Chain

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