Investors in the United States Oil Fund (USO) gained access to new options today, set to expire on May 20. A notable put option at a $143.00 strike price currently has a bid of $6.55, offering a cost basis of $136.45 if sold-to-open, representing a potential 1% discount on the current stock price of $144.13. The odds of this put contract expiring worthless are estimated at 55%, potentially yielding a 4.58% return on cash commitment, equivalent to a 111.46% annualized return.
On the call side, a $146.00 strike price call option is available with a bid of $6.20. If investors purchase shares at $144.13 and sell-to-open this call, they are committing to sell at $146.00, yielding a total return of about 5.60% if exercised by expiration. The chance of this call expiring worthless is approximately 51%, allowing investors to retain both the shares and the premium collected, which could yield a 4.30% extra return, or 104.67% annualized.
The implied volatility for the put contract stands at 77%, while the call contract has an implied volatility of 78%. Actual trailing twelve-month volatility is calculated at 42%.
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