Options Trading Insights for Blackstone Inc’s April Expiration

Investors in Blackstone Inc (Symbol: BX) saw new options commence trading for the April 25th expiration today. The YieldBoost formula from Stock Options Channel analyzed the BX options chain for the new contracts and pinpointed one put and one call option of notable interest.

Put Option Details

The identified put contract at the $145.00 strike price currently holds a bid of $4.65. If an investor decides to sell-to-open this put contract, they are agreeing to buy the stock at $145.00 while also collecting the premium. This arrangement effectively lowers the cost basis of the shares to $140.35 (excluding broker commissions), providing an appealing alternative for those interested in acquiring shares of BX, currently trading at $148.38/share.

Given that the $145.00 strike price is about a 2% discount from the current trading price, it raises the possibility that the put contract might expire worthless. Current analytical data suggests a 59% chance of this scenario. Stock Options Channel will monitor these odds over time and publish updates on the contract detail page. If the contract does expire worthless, the premium would yield a return of 3.21% on the cash commitment, or 23.43% annualized, a measure we refer to as the YieldBoost.

Below is a chart depicting the trailing twelve-month trading history for Blackstone Inc, with the $145.00 strike visually represented:

Call Option Overview

On the calls side, the contract at the $150.00 strike price carries a current bid of $6.30. Should an investor purchase BX shares at the present price of $148.38/share and sell-to-open this call contract as a “covered call,” they agree to sell the stock at $150.00. Accounting for the premium, this approach could generate a total return of 5.34% (excluding dividends, if any), should the stock be called away by the April 25th expiration.

However, holding shares while selling a covered call might limit potential upside if BX shares appreciate significantly. To gauge this risk, examining both the trailing twelve months of trading history and the company’s fundamentals is essential. Here’s a chart illustrating BX’s trading history with the $150.00 strike highlighted:

Since the $150.00 strike represents about a 1% premium over the current trading price, there remains a chance that the covered call could also expire worthless. In this scenario, the investor retains both their shares and the collected premium, with the current data indicating a 50% probability of this outcome. Stock Options Channel plans to track these odds, providing data updates on the contract detail page, including historical trading charts. Should the covered call expire worthless, the premium would equate to a 4.25% additional return for the investor, or 31.02% on an annualized basis, also regarded as the YieldBoost.

The implied volatility for the put contract is currently pegged at 38%, while the call contract’s implied volatility stands at 40%. In contrast, the actual trailing twelve-month volatility—factoring in the last 251 trading day closings and today’s price of $148.38—is calculated to be at 30%. For further options contract insights, visit StockOptionsChannel.com.

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