New Options for Truist Financial Offer Attractive Investment Opportunities

Investors in Truist Financial Corp (Symbol: TFC) found new options available today, expiring on May 30th. At Stock Options Channel, the YieldBoost formula has examined the TFC options chain and highlighted one put and one call contract of significant interest.

Put Option Overview

The put option at the $35.00 strike price currently has a bid of $1.66. By selling-to-open this put contract, an investor commits to purchasing the Stock at $35.00. This action allows them to collect the premium, effectively lowering their cost basis for the shares to $33.34 (before broker commissions). For someone already considering buying TFC shares, this strategy presents an attractive alternative to paying the current market price of $35.92 per share.

As the $35.00 strike represents approximately a 3% discount from the current trading price, the put contract could potentially expire worthless. Current analytics, including greeks and implied greeks, suggest a 58% chance of this occurring. Stock Options Channel will monitor these odds over time and publish changes on the contract detail page. Should the contract expire worthless, the premium would yield a 4.74% return on the cash commitment, equating to a 34.62% annualized return, a figure we term the YieldBoost.

Trading History for Truist Financial

Below is a chart illustrating the trailing twelve-month trading history for Truist Financial Corp, with the $35.00 strike clearly marked:

Call Option Analysis

On the call side, the contract at the $37.00 strike price is currently trading with a bid of 80 cents. An investor buying shares of TFC at $35.92/share and simultaneously selling-to-open this call contract as a “covered call” agrees to sell the Stock at $37.00. This move would generate a total return of 5.23% (excluding dividends) if the Stock is called away at the May 30th expiration. However, potential upside may be limited if TFC shares appreciate significantly, making it crucial to analyze past trading history and business fundamentals. Below is a chart of TFC’s trailing twelve-month trading history, with the $37.00 strike marked in red:

The $37.00 strike represents a 3% premium over the current trading price, indicating a possibility that the covered call could also expire worthless. In this scenario, the investor retains both the shares and the premium collected. Current data suggests a 56% likelihood that this outcome will occur. Our website will track these odds as they evolve and chart the trading history of the option contract. If the covered call does expire worthless, the premium would provide a 2.23% boost to the investor’s return, or an annualized 16.26%, another YieldBoost calculation.

Volatility and Market Insights

The implied volatility for the put contract stands at 45%, while the call contract shows an implied volatility of 41%. In contrast, the historical trailing twelve-month volatility is 31%, calculated from the past 251 trading days along with today’s closing price of $35.92. For more insights on put and call options, visit StockOptionsChannel.com.

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