New Options Unveiled for Baxter International: Analyzing Potential Gains
Investors in Baxter International Inc (Symbol: BAX) have access to exciting new options with an expiration date set for August 2025. With 239 days remaining until they expire, these new contracts may provide sellers of puts or calls a chance to earn a higher premium than those expiring sooner.
Examining the Put Contract at $27.50
Among the new options, a put contract at the $27.50 strike price is drawing attention, boasting a current bid of 15 cents. By selling this put contract, an investor commits to buying the stock at $27.50 while earning the premium. This means their effective cost basis would be $27.35 (before broker fees). For those considering buying BAX shares, this option presents a more appealing alternative to the current market price of $28.94 per share.
This $27.50 strike price provides an approximate 5% discount to current trading levels, indicating that the put is currently out-of-the-money by that margin. Analytical data suggests a 63% chance that the put contract could expire worthless. Stock Options Channel will monitor these odds over time and provide updates on their contract detail page. If the contract does expire worthless, the premium collected would yield a 0.55% return on the cash commitment, equivalent to a 0.83% annualized return — a scenario referred to as YieldBoost.
Below is a chart showing the last twelve months of trading history for Baxter International Inc, with the $27.50 strike price highlighted:
Analyzing the Call Contract at $30.00
On the calls side, a contract at the $30.00 strike price has a current bid of 55 cents. If an investor decides to purchase shares of BAX stock at today’s price of $28.94 and then sell this call contract to create a “covered call,” they would agree to sell their stock at the $30.00 price point. Considering the premium earned, this action could lead to a total return of 5.56% if the stock is called away by the August 2025 expiration (before broker fees). However, if BAX shares rise significantly, investors may miss out on additional gains, making it vital to evaluate both past trading behavior and current business fundamentals.
Below is a chart illustrating BAX’s trailing twelve-month trading history, with the $30.00 strike highlighted:
The $30.00 strike price indicates about a 4% premium above the current trading price, also marking it as out-of-the-money by that same percentage. There exists a possibility that this covered call contract could expire worthless, allowing the investor to keep both their shares and the premium collected. Current analytical data estimates a 50% chance of this occurring. Stock Options Channel will keep an eye on these odds, publishing updates and trading history on their website. If the covered call contract does expire worthless, the premium collected would reflect a 1.90% boost to the investor’s returns, or 2.90% annualized, which we refer to as YieldBoost.
The put contract’s implied volatility is set at 32%, while the call contract more modestly stands at 31%. In contrast, the actual trailing twelve-month volatility, calculated from the last 251 trading days alongside today’s price of $28.94, rests at 27%. For further put and call options contract opportunities, be sure to visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
Also see:
- Institutional Holders of NHS
- AKYA Options Chain
- Institutional Holders of BRTR
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
