Exploring Options for Amazon Stock
Today marked the onset of trading for new options linked to Amazon.com Inc (Symbol: AMZN) scheduled to expire on August 30th. The meticulous analysis conducted by the Stock Options Channel led to the detection of one put and one call contract that caught investors’ attention.
Strategic Put Option Play
The put contract positioned at the $195.00 strike price enticed investors with a current bid of $7.65, presenting an intriguing opportunity. By opting to sell-to-open this put contract, investors indicate readiness to procure the stock at $195.00 while benefiting from the premium, resulting in a $187.35 cost basis per share. This alternative appears quite enticing to investors contemplating AMZN shares at the current $196.56/share price.
Understanding Potential Outcomes
Amidst the analytical discussions, the $195.00 strike emerges as about a 1% discount from the prevailing stock price, translating to an out-of-the-money positioning. Consequently, the likelihood of the put contract expiring unsuccessfully stands at 58%, a metric Stock Options Channel will closely monitor over time.
Captivating Call Option Strategy
On the calls front, the call contract at the $200.00 strike unveiled a current bid of $9.35, captivating investors with a covered call approach. In this scenario, investors purchasing AMZN shares at $196.56/share and executing a “covered call” commit to selling the stock at $200.00, potentially securing a 6.51% total return if the stock is called away by August 30th.
Strategic Calculations
With the $200.00 strike representing roughly a 2% premium to the existing stock price, the covered call faces the chance of expiring worthless, with current odds standing at 50%. Stock Options Channel will diligently track these odds while providing insightful charts to depict this data over time.
Market Volatility Insights
Evaluating implied volatilities, the put contract example presents 34%, with the call contract reflecting 35%. On the other hand, the practical trailing twelve month volatility stands at 27%, based on the last 251 trading day closing values and today’s price of $196.56.
Future Prospects
For investors seeking additional put and call options insights, a visit to StockOptionsChannel.com could unveil compelling contract ideas with the potential for financial gains in the market.
