Market News Video
MNV MNV 10 Stocks Crossing Below Their 200 Day Moving Average
Free Dividend Report - Top Ranked Stocks

Featured MNV Articles:

The Math Shows SPMO Can Go To $41
Monday, February 4, 7:33 AM ET, by Market News Video Staff

Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, ...

Notable Two Hundred Day Moving Average Cross - WCG
Wednesday, February 27, 11:18 AM ET, by Market News Video Staff

In trading on Wednesday, shares of WellCare Health Plans Inc (WCG) crossed below their 200 ...

Wednesday Sector Laggards: Technology & Communications, Healthcare
Wednesday, February 27, 2:32 PM ET, by Market News Video Staff

In afternoon trading on Wednesday, Technology & Communications stocks are the worst performing sector, showing ...

Hologic Becomes #220 Most Shorted S&P 500 Component, Replacing WellCare Health Plans
Thursday, February 28, 10:22 AM ET, by Market News Video Staff

The most recent short interest data has been released for the 02/15/2019 settlement date, and ...

Monday Sector Laggards: Healthcare, Technology & Communications
Monday, March 4, 2:33 PM ET, by Market News Video Staff

In afternoon trading on Monday, Healthcare stocks are the worst performing sector, showing a 1.6% ...

Commit To Buy WellCare Health Plans At $210, Earn 2.8% Using Options

By Market News Video Staff, Wednesday, June 19, 11:51 AM ET
Play Video: How To Sell A PUT

If the video does not load after a few moments, Upgrade to the Latest Flash Player.

Investors considering a purchase of WellCare Health Plans Inc (NYSE:WCG) stock, but tentative about paying the going market price of $295.05/share, might benefit from considering selling puts among the alternative strategies at their disposal. One interesting put contract in particular, is the December 2020 put at the $210 strike, which has a bid at the time of this writing of $5.80. Collecting that bid as the premium represents a 2.8% return against the $210 commitment, or a 1.8% annualized rate of return (at Stock Options Channel we call this the YieldBoost).

Selling a put does not give an investor access to WCG's upside potential the way owning shares would, because the put seller only ends up owning shares in the scenario where the contract is exercised. And the person on the other side of the contract would only benefit from exercising at the $210 strike if doing so produced a better outcome than selling at the going market price. (Do options carry counterparty risk? This and six other common options myths debunked). So unless WellCare Health Plans Inc sees its shares fall 29% and the contract is exercised (resulting in a cost basis of $204.20 per share before broker commissions, subtracting the $5.80 from $210), the only upside to the put seller is from collecting that premium for the 1.8% annualized rate of return.

Below is a chart showing the trailing twelve month trading history for WellCare Health Plans Inc, and highlighting in green where the $210 strike is located relative to that history:

The chart above, and the stock's historical volatility, can be a helpful guide in combination with fundamental analysis to judge whether selling the December 2020 put at the $210 strike for the 1.8% annualized rate of return represents good reward for the risks. We calculate the trailing twelve month volatility for WellCare Health Plans Inc (considering the last 251 trading day closing values as well as today's price of $295.05) to be 32%. For other put options contract ideas at the various different available expirations, visit the WCG Stock Options page of

In mid-afternoon trading on Wednesday, the put volume among S&P 500 components was 1.11M contracts, with call volume at 1.11M, for a put:call ratio of 0.70 so far for the day, which is above normal compared to the long-term median put:call ratio of .65. In other words, if we look at the number of call buyers and then use the long-term median to project the number of put buyers we'd expect to see, we're actually seeing more put buyers than expected out there in options trading so far today. Find out which 15 call and put options traders are talking about today.

This Article's Word Cloud:   December   Health   Options   Plans   Stock   WellCare   YieldBoost   about   above   among   annualized   benefit   buyers   call   chart   considering   contract   exercised   fillColor   from   going   history   long   market   median   month   number   only   options   other   owning   premium   price   rate   ratio   represents   return   seller   selling   share   shares   stock   strike   term   than   that   this   today   trading   which
About Us - Advertise - Contact Us - Embedding Videos - Licensing Videos - Partners - mRSS / RSS Feed - Terms of Use - Privacy Policy
Home  |  Analyst News  Dividend Report  ETFs  Insider Report  Large Caps  Market Movers  Week Ahead Report  Weekly Market Wrap
MNV MNV Stock Message Boards Stock Market Definitions

Commit To Buy WellCare Health Plans At $210, Earn 2.8% Using Options | Market News Video | Copyright © 2008 - 2019, All Rights Reserved

Any ideas and opinions presented in all Market News Video clips are for informational and educational purposes only, and do not reflect the opinions of BNK Invest, Inc. or any of its affiliates, subsidiaries or partners. In no way should any content contained herein be interpreted to represent trading or investment advice. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person. All viewers agree that under no circumstances will BNK Invest, Inc,. its subsidiaries, partners, officers, employees, affiliates, or agents be held liable for any loss or damage caused by your reliance on information obtained. Read Full Disclaimer.