Investors in Apple Inc. saw new options become available this week, for the June 19th expirationMd Noman Siddique (Author) Published Date : Feb 25, 2015 11:18 IST
NYSE:AP; Investors saw the first week of June the 19th option, for Apple Inc. available this week. According to market experts, the time value is one of the key data points that goes into the price is an option buyer is prepared to pay.
So with 115 days until expiration the newly available contracts represent a potential opportunity for the sellers of puts or calls. A higher premium will be available to them than, it is available for the contracts with a closer expiration.
According to market data, the put contract at the $130.00 exercise price has an existing bid of $6.70. Analysts are saying that, if an investor was to sell-to-open that put contract, they are pledging to buy that stock at $130.00, but they will also collect the premium. Analysts say it will put the cost basis of the shares at $123.30 (before broker commission). According to market analysts, this will be an attractive alternative to pay $132.98/per share today for an investors who are interested in purchasing shares of APPL.
But the analysts are also issued a warning that, because the $130.00 strike represent an approximate 2% discount to the present trading price, there is a possibility that the put contract would expires of no value.
According to current market data, the odds for the put contract to expire of no value are 58%. But market analysts say, if the contract expires worthless the premium for the shares would represent a 5.15% boost of extra return to the investor, or 16.36% annualized.
According to market analysts the implied volatility in the put contract as well as call contract are approximately 27%. Market data also suggest that, the actual trailing twelve months volatility to be 22%.
Investors in Apple Inc. saw new options become available this week, for the June 19th expiration