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Investors in Union Pacific Corp (Symbol: UNP) saw new options trading begin today for the November 7th expiration. A notable put contract at the $200.00 strike price currently has a bid of 30 cents, which, if sold-to-open, would set a cost basis of $199.70 per share, representing a 14% discount from the current trading price of $232.03. The odds of this put contract expiring worthless are approximately 92%.
Additionally, a call contract at the $235.00 strike price has a bid of $4.90. If purchased and used as a covered call, this would yield a total return of 3.39% at expiration, excluding any dividends. This strike price is about 1% above the current trading price, with a 54% chance of the contract expiring worthless, allowing the investor to retain both shares and premium.
The implied volatility for the put contract is 32% and for the call contract, it is 24%. The actual trailing twelve-month volatility is calculated at 24% based on previous trading data.
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