First Week of GORO May 21st Options Trading
By Market News Video Staff, Friday, March 19, 11:54 AM ET
Investors in Gold Resource Corp (AMEX:GORO) saw new options become available this week, for the May 21st expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the GORO options chain for the new May 21st contracts and identified the following put contract of particular interest.
The put contract at the $2.50 strike price has a current bid of 5 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $2.50, but will also collect the premium, putting the cost basis of the shares at $2.45 (before broker commissions). To an investor already interested in purchasing shares of GORO, that could represent an attractive alternative to paying $2.76/share today.
Because the $2.50 strike represents an approximate 9% 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 69%. 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 2.00% return on the cash commitment, or 11.59% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Gold Resource Corp, and highlighting in green where the $2.50 strike is located relative to that history:
The implied volatility in the put contract example above is 121%.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $2.76) to be 65%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
This Article's Word Cloud:
AMEX
Arial
Because
Below
Channel
Corp
GORO
Gold
Investors
Meanwhile
Options
Puts
Resource
Should
Start
Stock
StockOptionsChannel
YieldBoost
also
call
chart
contract
current
expire
fillColor
greeks
history
implied
investor
month
odds
options
premium
price
represent
shares
stock
strike
that
they
this
those
today
trading
trailing
twelve
volatility
will
worthless
would