Investors in M&T Bank Corp (MTB) began trading new options today with a December 2027 expiration. The options include a put contract at a $195.00 strike price, which has a current bid of $27.60. Selling this put could result in a cost basis of $167.40 per share, offering approximately a 2% discount from the current trading price of $198.19. The odds of the put expiring worthless are estimated at 63%, potentially yielding a 14.15% return on cash commitment, or 8.02% annualized.
Another option is a call contract with a $200.00 strike price, currently bid at $30.90. If an investor purchases shares at $198.19 and sells this call, the total return could reach 16.50% if the shares are called away by expiration. The likelihood of the call expiring worthless is 44%, providing a 15.59% boost to an investor’s return, or 8.84% annualized.
Both contracts have an implied volatility of about 33%, while the actual trailing twelve-month volatility is calculated at 26%.
