MNV
Market News Video
MNV MNV 10 Stocks Crossing Below Book Value
MNV
MNV
MNV
MNV
MNV
MNV
MNV
Free Dividend Report - Top Ranked Stocks

Featured MNV Articles:

First Week of December 21st Options Trading For Office Depot (ODP)
Wednesday, October 24, 1:12 PM ET, by Market News Video Staff

Investors in Office Depot, Inc. (ODP) saw new options become available this week, for the ...

ODP: Insiders vs. Shorts
Tuesday, November 13, 2:47 PM ET, by Market News Video Staff

The most recent short interest data was recently released for the 10/31/2018 settlement date, and ...

Insiders Buy the Holdings of FYT ETF
Wednesday, November 14, 9:55 AM ET, by Market News Video Staff

A look at the weighted underlying holdings of the First Trust Small Cap Value AlphaDEX ...

Ex-Dividend Reminder: Lenova Group, Archer Daniels Midland and Office Depot
Monday, November 19, 10:10 AM ET, by Market News Video Staff

On 11/21/18, Lenova Group Ltd (LNVGF), Archer Daniels Midland Co. (ADM), and Office Depot, Inc.. ...

First Week of ODP July 2019 Options Trading
Wednesday, November 21, 10:41 AM ET, by Market News Video Staff

Investors in Office Depot, Inc. (ODP) saw new options begin trading this week, for the ...

Interesting ODP Put And Call Options For January 2022

By Market News Video Staff, Tuesday, September 17, 10:49 AM ET
Play Video: The Importance of ETFs


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

Investors in Office Depot, Inc. (NASDAQ:ODP) saw new options become available this week, for the January 2022 expiration. One of the key data points that goes into the price an option buyer is willing to pay, is the time value, so with 857 days until expiration the newly available contracts represent a possible opportunity for sellers of puts or calls to achieve a higher premium than would be available for the contracts with a closer expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the ODP options chain for the new January 2022 contracts and identified one put and one call contract of particular interest.

The put contract at the $1.00 strike price has a current bid of 28 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $1.00, but will also collect the premium, putting the cost basis of the shares at $0.72 (before broker commissions). To an investor already interested in purchasing shares of ODP, that could represent an attractive alternative to paying $1.65/share today.

Because the $1.00 strike represents an approximate 39% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 84%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 28.00% return on the cash commitment, or 11.92% annualized — at Stock Options Channel we call this the YieldBoost.

Below is a chart showing the trailing twelve month trading history for Office Depot, Inc., and highlighting in green where the $1.00 strike is located relative to that history:

Turning to the calls side of the option chain, the call contract at the $2.50 strike price has a current bid of 31 cents. If an investor was to purchase shares of ODP stock at the current price level of $1.65/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $2.50. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 70.30% if the stock gets called away at the January 2022 expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if ODP shares really soar, which is why looking at the trailing twelve month trading history for Office Depot, Inc., as well as studying the business fundamentals becomes important. Below is a chart showing ODP's trailing twelve month trading history, with the $2.50 strike highlighted in red:

Considering the fact that the $2.50 strike represents an approximate 52% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 55%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 18.79% boost of extra return to the investor, or 8.00% annualized, which we refer to as the YieldBoost.

The implied volatility in the put contract example is 114%, while the implied volatility in the call contract example is 87%.

Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 251 trading day closing values as well as today's price of $1.65) to be 63%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.


This Article's Word Cloud:   Channel   Depot   January   Office   Options   Stock   YieldBoost   also   available   call   chart   contract   contracts   covered   current   data   expiration   expire   fillColor   greeks   history   implied   investor   left   month   odds   option   options   premium   price   represent   return   sell   shares   stock   strike   that   they   this   those   time   trading   trailing   twelve   volatility   which   will   with   worthless   would
MNV
MNV
About Us - Advertise - Contact Us - Embedding Videos - Licensing Videos - Partners - mRSS / RSS Feed - Terms of Use - Privacy Policy
MNV
Home  |  Analyst News  Dividend Report  ETFs  Insider Report  Large Caps  Market Movers  Week Ahead Report  Weekly Market Wrap
MNV
MNV MNV Stock Message Boards Stock Market Definitions
MNV

Interesting ODP Put And Call Options For January 2022 | 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.