New Trading Opportunities Arise for EOS Energy as Options Launch
Investors are exploring fresh possibilities in EOS Energy Enterprises Inc (Symbol: EOSE) following the introduction of new options that expire on June 20th.
Today marks a significant development for EOSE investors as new options began trading. With 164 days left until expiration, these contracts may provide sellers of puts or calls an opportunity to earn a higher premium than available for options with closer expiration dates. Stock Options Channel utilized its YieldBoost formula to analyze the new June 20th contracts, pinpointing one put and one call option that stand out.
The put option at a $5.00 strike price currently bids at $1.06. An investor selling this put would agree to buy the stock at $5.00, while also collecting the premium. This would bring the effective purchase price down to $3.94 (excluding brokerage fees). For investors looking to buy EOSE shares, this alternative could be appealing compared to the current market price of $5.45 per share.
At this $5.00 strike price, there lies an approximate 8% discount to the current trading price of the stock, categorizing it as out-of-the-money by this percentage. Current analytics suggest a 72% chance that the put option could expire worthless. Stock Options Channel will monitor these odds and update their website with this information. If the put contract indeed expires worthless, the premium earned would yield a 21.20% return on the cash commitment, equivalent to a 47.19% annualized return, which is termed as YieldBoost.
Below is a chart detailing the trailing twelve-month trading history for EOS Energy Enterprises Inc, clearly showing where the $5.00 strike price stands within this history:
Now, shifting focus to the call options, the $10.00 strike price currently has a bid of 54 cents. Should an investor purchase EOSE shares at $5.45 and then sell the call option as a covered call, they would be agreeing to sell the shares at $10.00. With the premium included, this scenario offers a total return of 93.39% if the stock is called away by the June 20th expiration (minus broker fees). However, substantial upside could be missed if EOSE shares see significant appreciation, underscoring the importance of reviewing EOSE’s trading history and business fundamentals. Below is a chart showcasing EOSE’s trailing twelve-month trading record, highlighting the $10.00 strike price:
The $10.00 strike represents an approximate 83% premium to the current trading price, making it another out-of-the-money option. There’s a 64% chance this covered call could expire worthless, allowing the investor to retain both the premium and their shares. Stock Options Channel will also keep track of these odds over time, displaying updates on their website. If the covered call achieves this outcome, it would yield an extra return of 9.91% to the investor, or 22.06% on an annualized basis, again referred to as YieldBoost.
Implied volatility is rated at 127% for the put option and 111% for the call option. For reference, EOS Energy’s actual trailing twelve-month volatility is calculated to be 104%, based on the last 251 trading days and today’s price at $5.45. To explore more on put and call options worth considering, visit StockOptionsChannel.com.
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Also see:
- Top Stocks Held By Paul Singer
- AAC Options Chain
- RITT Historical Stock Prices
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
