MRO February 2022 Options begin to trade
IInvestors in Marathon Oil Corp. (symbol: MRO) saw new options become available today, for the February 2022 expiration. Stock option channel, our YieldBoost formula walked through the MRO options chain for new February 2022 contracts and identified a sale contract and a purchase contract of particular interest.
The contract to sell at the strike price of $ 14.00 has a current bid of 6 cents. If an investor were to sell to open this sales contract, they agree to buy the share at $ 14.00, but will also receive the premium, bringing the base price of the shares to $ 13.94 (before commissions broker). For an investor already interested in purchasing MRO shares, this could represent an attractive alternative to paying $ 16.47 / share today.
Since the strike price of $ 14.00 represents a discount of around 15% from the current share price (in other words, it’s out of the money by that percentage), it is also possible that the sales contract expires worthless. Current analytical data (including Greeks and Greeks implied) suggests that the current chance of this happening is 99%. Stock Options Channel will monitor these quotes over time to see how they evolve, posting a chart of these numbers on our website under contract detail page for this contract. If the contract expires worthless, the premium would represent a return of 0.43% on the cash commitment, or 3.64% annualized – at Stock Options Channel, we call that the YieldBoost.
Below is a chart showing the last twelve months trading history of Marathon Oil Corp., and highlighting in green where the $ 14.00 strike falls against that history:
As for the options chain call options, the $ 19.00 strike price call contract has a current bid of 5 cents. If an investor were to buy MRO shares at the current price level of $ 16.47 / share and then sell to open that purchase contract as a ‘covered call’, they agree to sell the share at 19, $ 00. Since the call seller will also receive the premium, this would generate a total return (excluding dividends, if any) of 15.66% if the stock was recalled at the February 2022 expiration (before broker commissions. ). Of course, a lot of benefits could be left on the table if MRO stocks really do soar, which is why it becomes important to look at Marathon Oil Corp.’s last twelve month trading history, as well as ” study the fundamentals of the business. Below is a chart showing the MRO’s last twelve months trading history, with the strike price of $ 19.00 highlighted in red:
Considering that the strike price of $ 19.00 represents a premium of around 15% over the current share price (in other words, it’s out of the money by that percentage), It is also possible that the covered purchase contract will expire worthless, in which case the investor would keep both his shares and the premium received. Current analytical data (including Greeks and Greeks implied) suggests that the current chance of this happening is 99%. On our website under contract detail page for this contract, Stock Options Channel will track these quotes over time to see how they change and publish a chart of these numbers (the option contract’s trading history will also be plotted). If the covered purchase contract expires worthless, the premium would represent an increase of 0.30% in the additional return to the investor, or 2.58% annualized, which we call the YieldBoost.
Meanwhile, we’re calculating the actual volatility for the past twelve months (taking into account the closing values of the past 252 trading days as well as today’s price of $ 16.47) to be 55%. For more put and call option contract ideas worth considering, visit StockOptionsChannel.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.