New Options for Public Storage Present Investment Opportunities

Investors in Public Storage (Symbol: PSA) have a chance to explore new options trading that began today, set to expire on September 19th. With 246 days remaining until expiration, these new contracts could offer sellers of puts or calls a better premium compared to those with shorter expiration dates.

Analyzing the Put Option: Potential Discounts on PSA Stock

For the put contract priced at $280.00, the current bid stands at $16.70. By selling this put option, an investor agrees to buy the stock at $280.00 but also earns the premium. This effectively lowers the cost basis to $263.30 per share, excluding broker commissions. For those looking to invest in PSA, this option could be a more cost-effective choice than purchasing shares at today’s price of $291.93.

The $280.00 strike price offers about a 4% discount from the current trading price, placing it out-of-the-money by that percentage. There’s a 60% chance that this put contract will expire worthless. Stock Options Channel will monitor these probabilities and display them on our website as they fluctuate. If the put expires worthless, the premium yields a 5.96% return on the cash commitment or an annualized return of 8.85%, a measure we term YieldBoost.

Below is a chart showing PSA’s trading history over the last twelve months, with the $280.00 strike price indicated in green:

Call Option Analysis: Evaluating Potential Returns

Shifting to the call options, the $300.00 strike contract has a current bid of $17.20. If an investor purchases PSA stock at $291.93 and then sells this call option as a “covered call,” they commit to selling the stock at $300.00. Including the premium received, this move could produce a total return of 8.66% if the shares are called away at expiration, excluding dividends and broker commissions. However, it’s important to consider that significant gains may be lost if PSA shares rise significantly.

Below is a chart showing PSA’s trading history over the last twelve months, with the $300.00 strike price highlighted in red:

The $300.00 strike price represents approximately a 3% premium to the current trading price, making it out-of-the-money by the same margin. There exists a 53% chance that this covered call option might expire worthless, allowing the investor to retain both their shares and the premium. Stock Options Channel will track these probabilities and update them over time, along with a trading history chart of the option contract. Should the call expire worthless, the premium results in a 5.89% additional return or an annualized 8.74% return, thus contributing to our YieldBoost metric.

Both put and call contracts feature an implied volatility of approximately 26%. In contrast, our calculation of trailing twelve-month volatility, based on the last 251 trading days and the current price of $291.93, stands at 23%. For more ideas on put and call options worth considering, visit StockOptionsChannel.com.

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Additional Information:

• Institutional Holders of TMTC
• Funds Holding CRVS
• HAUP Videos

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