Investors in STMicroelectronics NV (NYSE: STM) can explore new options starting today, with contracts expiring on June 12. A notable put contract is available at a $52.00 strike price, currently carrying a bid of $1.40. Selling this put would obligate investors to purchase the stock at $52.00 but allows them to collect the premium, effectively lowering the cost basis to $50.60 per share. This represents a 2% discount from the current market price of $52.91.
In addition, there is a call contract at a $54.00 strike price with a current bid of $1.70. If investors buy shares at $52.91 and sell this covered call, they could potentially achieve a total return of 5.27% if the stock is called away by expiration. This strike price reflects a 2% premium to the current trading price, with a 49% chance the covered call may expire worthless.
The implied volatility for the put contract is 56%, while the call contract has an implied volatility of 55%. Current trailing twelve-month volatility for STM stands at 49%.
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