Investors in Verizon Communications Inc. (VZ) gained access to new options contracts, particularly for expiration on May 1st. Notably, a put contract at the $50.00 strike price is currently priced at a bid of $1.57. This means an investor selling to open this contract would agree to purchase shares at $50.00, with an effective cost basis of $48.43 after accounting for the premium.
The $50.00 strike price offers about a 1% discount compared to Verizon’s current trading price of $50.48. There is a 55% likelihood that the put contract will expire worthless, which could yield a 3.14% return on the cash commitment, translating to an annualized return of 22.92%. The implied volatility for this contract stands at 28%, while the actual trailing twelve-month volatility is calculated at 23%.
