Investors in Suncor Energy Inc (NYSE:SU) saw new options begin trading today, for the December 4th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the SU options chain for the new December 4th contracts and identified the following put contract of particular interest.
The put contract at the $11.00 strike price has a current bid of 45 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $11.00, but will also collect the premium, putting the cost basis of the shares at $10.55 (before broker commissions). To an investor already interested in purchasing shares of SU, that could represent an attractive alternative to paying $11.49/share today.
Because the $11.00 strike represents an approximate 4% 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 100%. 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 4.09% return on the cash commitment, or 34.69% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Suncor Energy Inc, and highlighting in green where the $11.00 strike is located relative to that history:
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $11.49) to be 69%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
This Article's Word Cloud:ArialBecauseBelowChannelDecemberEnergyInvestorsMeanwhileNYSEOptionsPutsShouldStartStockStockOptionsChannelStrikeSuncorYieldBoostactualafterLeftLabelsalsocallchartcontractcurrentexpirefillColorgreekshistoryinvestormonthoddsoptionspremiumpricerepresentsharesstockstrikethattheythisthosetodaytradingtrailingtwelvewillworthlesswould
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.