Interesting CNET Call Options For June 18th
By Market News Video Staff, Friday, May 7, 10:44 AM ET
Investors in ZW Data Action Technologies Inc (NASDAQ:CNET) saw new options become available this week, for the June 18th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the CNET options chain for the new June 18th contracts and identified the following call contract of particular interest.
The call contract at the $2.00 strike price has a current bid of 15 cents. If an investor was to purchase shares of CNET stock at the current price level of $1.77/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $2.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 21.47% if the stock gets called away at the June 18th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if CNET shares really soar, which is why looking at the trailing twelve month trading history for ZW Data Action Technologies Inc, as well as studying the business fundamentals becomes important. Below is a chart showing CNET's trailing twelve month trading history, with the $2.00 strike highlighted in red:
Considering the fact that the $2.00 strike represents an approximate 13% 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 48%. 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 8.47% boost of extra return to the investor, or 73.65% annualized, which we refer to as the YieldBoost.
The implied volatility in the call contract example above is 160%.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $1.77) to be 157%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
This Article's Word Cloud:
Action
Arial
Below
CNET
Channel
Considering
Data
June
Options
Stock
Technologies
YieldBoost
also
call
chart
contract
covered
current
expiration
expire
fillColor
greeks
history
implied
investor
left
looking
month
odds
options
premium
price
return
sell
shares
stock
strike
that
they
this
those
trading
trailing
twelve
volatility
well
which
will
worthless
would