March 22nd Options Now Available For PPL

Jan 21 2014, 10:51am CST | by

March 22nd Options Now Available For PPL

Investors in PPL Corp (NYSE: PPL) saw new options begin trading today, for the March 22nd expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the PPL options chain for the new March 22nd contracts and identified one put and one call contract of particular interest.

The put contract at the $29.0 strike price has a current bid of 45 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $29.0, but will also collect the premium, putting the cost basis of the shares at $28.55 (before broker commissions). To an investor already interested in purchasing shares of PPL, that could represent an attractive alternative to paying $29.66/share today.

Because the $29.0 strike represents an approximate 2% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 61%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 1.55% return on the cash commitment, or 9.45% annualized — at Stock Options Channel we call this the YieldBoost.

Click here to find out the Top YieldBoost Puts of the S&P 500 »

Below is a chart showing the trailing twelve month trading history for PPL Corp, and highlighting in green where the $29.0 strike is located relative to that history:

Turning to the calls side of the option chain, the call contract at the $30.0 strike price has a current bid of 35 cents. If an investor was to purchase shares of PPL stock at the current price level of $29.66/share, and then sell-to-open that call contract as a “covered call,” they are committing to sell the stock at $30.0. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 2.33% if the stock gets called away at the March 22nd expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if PPL shares really soar, which is why looking at the trailing twelve month trading history for PPL Corp, as well as studying the business fundamentals becomes important. Below is a chart showing PPL’s trailing twelve month trading history, with the $30.0 strike highlighted in red:

Considering the fact that the $30.0 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 60%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 1.18% boost of extra return to the investor, or 7.18% annualized, which we refer to as the YieldBoost.

Click here to find out the Top YieldBoost Calls of the S&P 500 »

The implied volatility in the put contract example is 16%, while the implied volatility in the call contract example is 15%. Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 251 trading day closing values as well as today’s price of $29.66) to be 14%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.

Source: Forbes Business

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

How Box Office Prices For Bruins Playoff Tickets Are Killing The Secondary Ticket Market
The Bruins have a long history of success with six Stanley Cups championships, most recently in 2010-11.  Heading into the 2014 NHL Playoffs, the Boston Bruins are favored by Las Vegas to win their seventh.  While that’...
 
 
Pizza Maker – Cooking Games Made by Wizards Time LLC Now for iOS
iPhone and iPad users can finally accept the challenge of getting a pizza master chef tittle.
 
 
Lucintel Forecasts North America as Leading Aerospace APU Market During 2013-2020
The global aerospace auxiliary power unit (APU) market is projected to witness moderate growth and reach $3.27 billion by 2020. The APU is crucial for aircraft as it supplies power during ground operations and helps start the engines. The North American aerospace APU market is expected to continue leading among the four global regions.
 
 
Printing Ink Market in China to 2018 - Market Size, Trends, and Forecasts
Marketreportsonchina.com presents a report on “Printing Ink Market in China to 2018 - Market Size, Trends, and Forecasts” which offers the most up-to-date market data on the actual market situation, trends and future outlook for printing ink in China.
 
 
 

Latest from the Network

How Box Office Prices For Bruins Playoff Tickets Are Killing The Secondary Ticket Market
The Bruins have a long history of success with six Stanley Cups championships, most recently in 2010-11.  Heading into the 2014 NHL Playoffs, the Boston Bruins are favored by Las Vegas to win their seventh.  While that’...
Read more on Business Balla
 
Khloe Kardashian is mortified by old photographs
Khloe Kardashian is mortified when she looks at old photos of herself. The reality star might have a successful fashion range with her sisters Kim and Kourtney to her name, with the new Spring/Summer Kardashian...
Read more on Celebrity Balla
 
Mel C is planning an autobiography
Mel C wants to write an autobiography when she's 80. The former Spice Girl plans to reveal the band's secrets in a tell-all book, but says she wants to wait until she's an "old woman" so she doesn't get into trouble...
Read more on Celebrity Balla
 
Pep Talk from Olympian in Episode 9 "Mission Milestone" on Mission Makeover on Lifetime®
Pompano Beach, FL, April 19, 2014 --(PR.com)-- All journeys begin with a single step. This week, the Mission Makeover ladies are taking on their biggest challenge yet -- a 5K run. Make sure to tune in on Monday, April...
Read more on TV Balla
 
Enterprises TV Airs in Phoenix, Arizona in April
Coral Springs, FL, April 19, 2014 --(PR.com)-- The Enterprises TV program will air in the &#8220;Valley of the Sun&#8221; during the month of April. Phoenix, Arizona is America&#8217;s sixth-largest city, and one...
Read more on TV Balla
 
Pizza Maker – Cooking Games Made by Wizards Time LLC Now for iOS
Nis, Serbia and Montenegro, April 19, 2014 --(PR.com)-- Wizards Time LLC announced that Pizza Maker &#8211; Cooking Games, cooking game for kids, is now ready for free download on iTunes. The game which is in the...
Read more on Business Balla
 
Lucintel Forecasts North America as Leading Aerospace APU Market During 2013-2020
Irving, TX, April 19, 2014 --(PR.com)-- The global aerospace auxiliary power unit (APU)market is projected to witness moderate growth and reach $3.27 billion by 2020. The APU is crucial for aircraft as it supplies...
Read more on Business Balla
 
Printing Ink Market in China to 2018 - Market Size, Trends, and Forecasts
Mumbai, India, April 19, 2014 --(PR.com)-- This industry report offers the most up-to-date market data on the actual market situation, trends and future outlook for printing ink in China. The research includes...
Read more on Business Balla
 
FEA Training Consultants Inc. Hosts Hands-On Training Session on SolidWorks Electrical 2014
Mississauga, Canada, April 19, 2014 --(PR.com)-- FEA Training Consultants Inc., a licensed engineering company and authorized SolidWorks value added reseller specializing in SolidWorks 3D CAD design, SolidWorks Finite...
Read more on Business Balla
 
myGeoTracking Mobile Workforce Management Service, Introduces Automated Near “Zero-Touch” Time Clocking Features
Palo Alto, CA, April 19, 2014 --(PR.com)-- Abaqus, Inc., a provider of the first-of-a-kind myGeoTracking cloud-hosted location and messaging platform, has combined geo-zones, rules, messaging and hybrid GPS/Wi-Fi...
Read more on Business Balla
 
 
Auto Balla Sexy Balla Sport Balla TV Balla Politics Balla Movie Balla Apple Balla Business Balla Ad Balla Celebrity Balla