Suncor Energy Inc (Symbol: SU) introduced new options today with an expiration date of July 10. Notably, a put contract at a $63.00 strike price has a current bid of 20 cents, allowing investors to commit to purchasing shares at $63.00, effectively reducing the cost basis to $62.80. This represents a 1% discount from the current trading price of $63.92. The probability of the contract expiring worthless stands at 60%, suggesting a potential yield of 0.32% on the cash commitment, or 2.69% annualized.
On the call side, a $65.00 strike price contract is bidding at 65 cents. If investors buy shares at $63.92 and sell this covered call, they would commit to selling at $65.00, which could yield 2.71% total return if exercised. The odds of this contract expiring worthless are estimated at 51%, potentially providing an extra 1.02% return (8.63% annualized). Both contracts have an implied volatility of approximately 33%, while Suncor’s actual trailing volatility is calculated at 24%.
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