New options for Toronto Dominion Bank (TD) began trading today, with contracts expiring on December 18. The put contract at the $120.00 strike price has a current bid of $2.25, offering a premium that could reduce the cost basis of shares to $117.75 for investors interested in purchasing TD shares. This put option represents an approximate 2% discount to the current trading price of $122.20, with a 59% chance of expiring worthless.
On the call side, the $125.00 strike price call contract has a bid of $2.95. If purchased, investors could achieve a total return of 4.71% if the shares are called away at expiration. This call option is also approximately 2% out-of-the-money, with a 56% likelihood of expiring worthless. The implied volatility for the put is 22% and for the call is 23%, while the actual trailing twelve-month volatility stands at 18%.
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