Investors in Stryker Corp (NYSE: SYK) have new options available today, set to expire on July 17, 2023. Notably, a put contract at a $340 strike price has a current bid of $15.10, which effectively lowers the cost basis for purchasing the shares to $324.90, compared to the current price of $343.17. This represents a 1% discount to the current trading price, with a 57% chance that the put would expire worthless, yielding a potential 4.44% return on the cash commitment or 17.06% annualized.
Additionally, a call contract at a $350 strike price is available for a bid of $14.60. If an investor buys shares at $343.17 and sells this covered call, the total return could reach 6.24% if the stock is called away, assuming a 52% probability of the call expiring worthless and allowing the investor to retain both shares and premium. The implied volatility for the put is 28%, while for the call, it’s 27%, compared to the actual trailing twelve-month volatility of 20%.
