Nov 26 options now available for Citigroup (C)
IInvestors in Citigroup Inc (ticker: C) saw new options start trading today, with the November 26 expiration. TO Stock option channel, our YieldBoost formula walked through the C options chain for new November 26 contracts and identified a sell contract and a buy contract of particular interest.
The contract to sell at the strike price of $ 71.00 has a current bid of 65 cents. If an investor were to sell to open this sales contract, they agree to buy the stock at $ 71.00, but will also receive the premium, bringing the base price of the shares to $ 70.35 (before commissions broker). For an investor already interested in buying C shares, this could represent an attractive alternative to paying $ 73.08 / share today.
Since the strike price of $ 71.00 represents a discount of around 3% from the current share price (in other words, it is 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 61%. 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 0.92% on the cash commitment, or 6.68% annualized – at Stock Options Channel, we call that the YieldBoost.
Below is a chart showing Citigroup Inc’s past twelve month trading history, and highlighting in green where the $ 71.00 strike price is against that history:
As for the options chain call options, the strike price call contract of $ 78.00 has a current bid of 23 cents. If an investor were to buy C shares at the current price level of $ 73.08 / share and then sell to open that purchase contract as a “covered call”, they agree to sell the share at 78, $ 00. Since the call seller will also receive the premium, this would generate a total return (excluding dividends, if any) of 7.05% if the stock was recalled at the November 26 expiration (before broker commissions. ). Of course, a lot of benefits could be left on the table if C stocks really skyrocket, which is why it becomes important to look at Citigroup Inc’s past twelve month trading history, as well as study. the fundamentals of the business. Below is a chart showing C’s past twelve months trading history, with the strike price of $ 78.00 highlighted in red:
Since the strike price of $ 78.00 represents a premium of around 7% over the current share price (in other words, it is out of the money by that percentage), it is 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 71%. 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 a 0.31% increase in the additional return to the investor, or 2.30% annualized, which we call the YieldBoost.
The implied volatility in the sales contract example is 41%, while the implied volatility in the sales contract example is 44%.
Meanwhile, we calculate the actual volatility of the past twelve months (taking into account the closing values of the last 252 trading days as well as today’s price of $ 73.08) at 31%. 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.