Investors in Ford Motor Co. (Symbol: F) have access to new options contracts for June 2027, which offer significant time value due to the 517 days until expiration. The put contract at a $12.00 strike price is currently bidding at 60 cents, effectively allowing investors to purchase shares at a reduced cost basis of $11.40 if sold. This price represents a 12% discount to the current trading price of $13.66, with a 69% probability of expiration without value. Should the contract expire worthless, it would yield a 5% return on cash commitment or 3.53% annualized.
On the call side, a $15.00 strike price call option is bidding at 85 cents. If investors buy shares at $13.66 and sell this call, they could secure a total return of 16.03% by expiration, provided the stock appreciates sufficiently. This strike is approximately 10% out-of-the-money, with a 43% chance of expiring worthless. In such a case, the premium would offer an additional 6.22% return.
