Delving into August 2nd Options for Amazon.com
Today marks the initiation of new options trading for Amazon.com Inc (Symbol: AMZN), with options set to expire on August 2nd. Investors have the chance to leverage this opportunity for potential gains and strategic positioning.
Strategic Puts and Calls Insight
As options trading opens up for August 2nd, astute investors are considering a put contract at the $180.00 strike price and a call contract at the $190.00 strike. These options present intriguing prospects for investors to either purchase shares or sell covered calls, with lucrative potential returns on investment.
Unveiling the Put Contract Strategy
For investors eyeing the put contract at the $180.00 strike, a bid of $4.85 awaits. By selling-to-open this put contract, investors commit to acquiring the stock at $180.00, cushioned by collecting the premium. This move could potentially result in a cost basis of $175.15 per share, offering a compelling alternative to current trading prices.
Exploring Out-of-the-Money Potential
The $180.00 strike showcases an approximately 3% discount to the current stock price, positioning the put contract as an out-of-the-money consideration. Analytical data suggests a 67% chance of the put contract expiring without value, providing insight into potential outcomes for investors.
Charting Stock History
Visualizing the trailing twelve-month trading history for Amazon.com Inc, the $180.00 strike point is highlighted, offering investors a contextual backdrop for their options strategies.
The Call Contract Conundrum
On the flip side, the call contract at the $190.00 strike beckons with a bid of $7.50. Investors may opt for a covered call approach, selling this contract after purchasing shares at the current trading price of $186.24. This strategy could yield a robust 6.05% return if the stock gets called away at expiration.
Unveiling Upside Potential
Though the $190.00 strike represents a 2% premium to the current stock price, signaling an out-of-the-money status, the covered call contract brings in its own set of possibilities. With a 51% chance of expiring worthless, investors have a balancing act to consider based on historical performance.
Understanding Volatility
Analyzing implied volatility in both put and call contracts, alongside actual trailing twelve-month volatility, provides critical insights for investors delving into options trading. These metrics paint a vivid picture of the potential risks and rewards associated with Amazon.com options.
