New Abercrombie & Fitch Options Highlight Investment Opportunities
Investors in Abercrombie & Fitch Co (Symbol: ANF) observed new options trading today for the June 27th expiration. According to Stock Options Channel, our YieldBoost formula identified a noteworthy put and call contract in the new June 27th options chain.
Put Contract Insights
The put contract at a $70.00 strike price has a current bid of $5.50. Selling-to-open this put commits an investor to purchase the stock at $70.00 while also collecting the premium, which effectively lowers the cost basis to $64.50 (excluding broker commissions). For investors considering an entry point at ANF, this strategy offers a compelling alternative to the current share price of $71.42.
Market Context and Probabilities
This $70.00 strike price represents about a 2% discount from the current trading price, indicating it is out-of-the-money by that percentage. Current analytical data suggests a 58% chance that the put contract may expire worthless. Stock Options Channel will monitor these odds over time, offering updated charts on the contract’s detail page. Should the contract expire worthless, the premium would yield a return of 7.86% on the cash commitment, translating to an annualized return of 57.36%, a metric we refer to as YieldBoost.
Call Contract Considerations
On the call side, the contract at the $73.00 strike price currently bids at $5.10. An investor purchasing shares at the present price of $71.42 and selling-to-open this call contract would be agreeing to sell the stock at $73.00. Including the collected premium, this action results in a total return of 9.35% if the stock is called away at the June 27th expiration (excluding dividends and broker commissions). A significant upside remains if ANF shares rise sharply, necessitating an analysis of both historical trading patterns and business fundamentals.
Performance and Risk Analysis
The $73.00 strike represents an approximate 2% premium over the current trading price, indicating that there is also a risk of the covered call expiring worthless. In that scenario, the investor retains their shares and the premium collected. Current data indicates a 48% probability of this outcome. Stock Options Channel will keep track of these odds and chart the trading history of this option contract. If it does expire worthless, the premium could provide a 7.14% boost to returns, or 52.13% on an annualized basis, also classified as YieldBoost.
Volatility Overview
The implied volatility for the put contract stands at 75%, while the call contract’s implied volatility is 70%. The actual trailing twelve-month volatility, based on the last 250 trading day closes and today’s price of $71.42, has been calculated at 64%. For additional put and call options contract ideas, investors can explore resources available at Stock Options Channel.
The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
