Investors in Wells Fargo & Co (WFC) have new options available for the November 6th expiration, with strategic contracts identified in the options chain. The put contract at the $81.00 strike price has a current bid of $1.20, allowing investors to effectively purchase shares at a cost basis of $79.80 if exercised. This represents a 1% discount to today’s trading price of $81.52, with a 56% chance of the contract expiring worthless, yielding a 1.48% return on cash commitment.
On the call side, a contract at the $82.00 strike price bids at $1.23. If an investor buys shares at $81.52 and sells the call, they are committing to a total return of 2.10% at expiration. This strike is also approximately 1% above the current price, with a 49% likelihood of expiring worthless, yielding a potential 1.51% additional return. The implied volatility for the put is 32%, while for the call it’s 30%, compared to a trailing twelve month volatility of 27%.
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