New Opportunities for Options Traders
Options for Ford Motor Co. (Symbol: F) with a December 2026 expiration began trading recently, offering potential opportunities for sellers of puts or calls. With 1074 days until expiration, these newly trading contracts provide a unique possibility for investors to capitalize on time value and achieve a higher premium compared to contracts with a closer expiration.
Assessing Put Options
One put contract at the $8.00 strike price has a current bid of $1.03, offering investors a chance to purchase the stock at $8.00 and collect the premium. This results in a cost basis of $6.97 per share, which may be an attractive alternative for investors interested in acquiring F shares, especially considering the current trading price of $11.85.
The $8.00 strike represents an approximate 32% discount to the stock’s current trading price, indicating the possibility that the put contract could expire worthless. However, the current odds of this happening are 99%. If the contract does expire worthless, the premium would yield a 12.88% return on the cash commitment, or 4.38% annualized, known as the YieldBoost.
Exploring Call Options
On the calls side, the call contract at the $12.00 strike price has a current bid of $2.09. Sellers of the call contract at this level commit to selling the stock at $12.00, which could lead to a total return of 18.90% if the stock gets called away at the December 2026 expiration (before broker commissions).
While the $12.00 strike represents an approximate 1% premium to the current trading price of the stock, there is still a 99% chance that the covered call contract could expire worthless. In this scenario, the premium would represent a 17.64% boost of extra return to the investor, or 5.99% annualized, labeled as the YieldBoost.
Volatility and Additional Considerations
The actual trailing twelve-month volatility is calculated to be 36%, taking into account the last 251 trading day closing values as well as today’s price of $11.85. This data provides valuable insights for investors considering these options contracts.
For more put and call options contract ideas worth evaluating, visit StockOptionsChannel.com.
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