With Ford Motor Co. (Symbol: F) being a perennial favorite among stock options enthusiasts, let’s delve into an interesting put contract and a call contract for the December 2025 expiration period.
Exploring the Put Contract
The put contract at the $8 strike has piqued the interest of our YieldBoost algorithm. Currently bid at 68 cents, collecting this amount as the premium yields an 8.5% return against the $8 commitment or a 4.4% annualized rate of return – christened as the YieldBoost at Stock Options Channel.
While selling a put doesn’t offer access to F’s potential upside akin to owning shares, the put seller only ends up owning shares should the contract be exercised. The potential upside to the put seller is from collecting the premium for the 4.4% annualized rate of return, unless Ford Motor Co. sees its shares decline by 33.1% and the contract is exercised.
Unpacking the Call Contract
For those eyeing additional income beyond Ford Motor Co.’s 5% annualized dividend yield, selling the covered call at the $15 strike and collecting the $1.05 bid premium can annualize to an additional 4.5% rate of return against the current stock price, amounting to a total of 9.5% annualized rate if the stock isn’t called away.
In the scenario where the stock is not called away, any upside above $15 would be lost if the stock rises there. However, F shares would have to climb 25.4% from current levels for that to occur. In a scenario where the stock is called, the shareholder would have earned a 34.2% return from this trading level, in addition to any dividends collected before the stock is called.
The chart below illustrates the trailing twelve month trading history for Ford Motor Co., highlighting the $8 strike in green and the $15 strike in red:
This chart, combined with the stock’s historical volatility, can serve as a valuable guide in evaluating the December 2025 put or call options highlighted in this article. The trailing twelve month volatility for Ford Motor Co. is calculated to be 36%, considering the last 250 trading day F historical stock prices using closing values, as well as the current price of $11.96.
In the day’s mid-afternoon trading, the put volume among S&P 500 components was at 2.56M contracts, with call volume at 2.56M. This resulted in a put:call ratio of 0.71 so far for the day, which exceeds the long-term median put:call ratio of .65. Contrary to the expected number of put buyers, the options trading market appears to see more put buyers than anticipated.
Explore the 15 call and put options traders are discussing today
Also see:
Funds Holding SXL
Top Ten Hedge Funds Holding AEUA
KSPN shares outstanding history
