360° Coverage : Interesting January 2016 Stock Options for HAL

2 Updates

Interesting January 2016 Stock Options for HAL

Jan 27 2014, 11:13am CST | by

Consistently, one of the more popular stocks people enter into their stock options watchlist at Stock Options Channel is Halliburton Company (NYSE: HAL). So this week we highlight one interesting...

Filed under: news

 
 
 

33 weeks ago

Interesting January 2016 Stock Options for HAL

Jan 27 2014, 11:13am CST | by

Consistently, one of the more popular stocks people enter into their stock options watchlist at Stock Options Channel is Halliburton Company (NYSE: HAL). So this week we highlight one interesting put contract, and one interesting call contract, from the January 2016 expiration for HAL.

The put contract our YieldBoost algorithm identified as particularly interesting, is at the $33 strike, which has a bid at the time of this writing of $1.76. Collecting that bid as the premium represents a 5.3% return against the $33 commitment, or a 2.7% annualized rate of return (at Stock Options Channel we call this the YieldBoost).

Click here to find out the Top YieldBoost HAL Puts »

Selling a put does not give an investor access to HAL’s upside potential the way owning shares would, because the put seller only ends up owning shares in the scenario where the contract is exercised. So unless Halliburton Company sees its shares decline 31.5% and the contract is exercised (resulting in a cost basis of $31.24 per share before broker commissions, subtracting the $1.76 from $33), the only upside to the put seller is from collecting that premium for the 2.7% annualized rate of return.

Interestingly, that annualized 2.7% figure actually exceeds the 1.2% annualized dividend paid by Halliburton Company by 1.5%, based on the current share price of $48.16. And yet, if an investor was to buy the stock at the going market price in order to collect the dividend, there is greater downside because the stock would have to lose 31.54% to reach the $33 strike price.

Always important when discussing dividends is the fact that, in general, dividend amounts are not always predictable and tend to follow the ups and downs of profitability at each company. In the case of Halliburton Company, looking at the dividend history chart for HAL below can help in judging whether the most recent dividend is likely to continue, and in turn whether it is a reasonable expectation to expect a 1.2% annualized dividend yield.

Turning to the other side of the option chain, we highlight one call contract of particular interest for the January 2016 expiration, for shareholders of Halliburton Company (NYSE: HAL) looking to boost their income beyond the stock’s 1.2% annualized dividend yield. Selling the covered call at the $65 strike and collecting the premium based on the $2.31 bid, annualizes to an additional 2.4% rate of return against the current stock price (this is what we at Stock Options Channel refer to as the YieldBoost), for a total of 3.7% annualized rate in the scenario where the stock is not called away. Any upside above $65 would be lost if the stock rises there and is called away, but HAL shares would have to advance 34.9% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 39.6% return from this trading level, in addition to any dividends collected before the stock was called.

Click here to find out the Top YieldBoost HAL Calls »

The chart below shows the trailing twelve month trading history for Halliburton Company, highlighting in green where the $33 strike is located relative to that history, and highlighting the $65 strike in red:

The chart above, and the stock’s historical volatility, can be a helpful guide in combination with fundamental analysis to judge whether selling the January 2016 put or call options highlighted in this article deliver a rate of return that represents good reward for the risks. We calculate the trailing twelve month volatility for Halliburton Company (considering the last 251 trading day HAL historical stock prices using closing values, as well as today’s price of $48.16) to be 25%.

In mid-afternoon trading on Monday, the put volume among S&P 500 components was 1.05M contracts, with call volume at 1.86M, for a put:call ratio of 0.56 so far for the day. Compared to the long-term median put:call ratio of .65, that represents high call volume relative to puts; in other words, buyers are showing a preference for calls in options trading so far today.
Find out which 15 call and put options traders are talking about today./>

Source: Forbes Business

 
Update
2

2 weeks ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new company (NewCo) and slashing the workforce of 2 ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

3 weeks ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the double tragedies of MH370 and ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

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

Smoking causes urological diseases
Vienna, Sep 19 (IANS) Smoking leads to a number of urological diseases, experts said.
 
 
'Angelina Effect' makes more women test for breast cancer
Islamabad, Sep 19 (IANS) At least three militants were killed Friday in a remote-controlled blast in Pakistan.
 
 
Want good raise at work? Get a supportive wife
New York, Sep 19 (IANS) Do not just blame your boss or jealous colleagues for no promotion or salary hike at work - your spouse's personality is equally important to decide if your chosen career will make you richer or poorer.
 
 
People with larger pupil size bad decision makers
London, Sep 19 (IANS) People with larger pupil size tend to be inconsistent in their decisions, says a study.
 
 
 

Latest from the Network

Iranian hardliners form 'chastity patrols'
Tehran, Sep 19 (IANS/EFE) "Chastity patrols", created by an Iranian paramilitary group, are patrolling the streets of Iran to force women to go "well covered" in public. At the beginning of summer, trendy Iranian...
Read more on Politics Balla
 
Sophia Loren celebrates 80th birthday with an exhibition
Los Angeles, Sep 19 (IANS) Italian actress Sophia Loren, who will turn 80 Saturday, will celebrate her birthday with an exhibition displaying her most prized possessions in Mexico. The Oscar winner's belongings,...
Read more on Celebrity Balla
 
Liam Neeson scared of heights
New York, Sep 19 (IANS) Actor Liam Neeson may be known as a action star, but there is one thing that terrifies him: Heights. The 62-year-old actor admits he suffers from acrophobia and can't even manage to stand on a...
Read more on Celebrity Balla
 
Jeptoo targets history in Chicago Marathon
Nairobi, Sep 19 (IANS) History will be beckoning for Boston Marathon champion Rita Jeptoo of Kenya when she lines up at the Chicago City course for the 42km race Oct 12. Jeptoo is chasing her maiden win in the World...
Read more on Sport Balla
 
UN urges diplomatic accord on Iran's n-programme
United Nations, Sep 19 (IANS) UN Secretary-General Ban Ki-moon has urged a comprehensive agreement on Iran's nuclear programme at an early date. Ban made the appeal at a meeting Thursday with visiting Iranian Foreign...
Read more on Politics Balla
 
Bieber, Gomez moving in together?
Los Angeles, Sep 19 (IANS) Singer Justin Bieber has reportedly asked his girlfriend Selena Gomez to move into his house here. As per a report in hollywoodlife.com, Bieber, who rekindled his romance with Gomez recently...
Read more on Celebrity Balla
 
Smoking causes urological diseases
Vienna, Sep 19 (IANS) Smoking leads to a number of urological diseases, experts said. Reduced fertility, impotence, and bladder carcinoma are problems caused by smoking, the Association of Austrian Urologists (BVU)...
Read more on Business Balla
 
Lily Allen shares tips for applying eyeliner
London, Sep 19 (IANS) Singer Lily Allen may have popular make-up artists taking care of her looks, but she knows it takes practise to perfect the art of applying eyeliner. In an interview with Now magazine, she said "...
Read more on Celebrity Balla
 
Baek readies himself for Asia-Pacific Golf Championship
Tokyo, Sep 19 (IANS) Korea's Baek Seuk-hyun is relishing the prospect of teeing up against some of the best players from the Asian Tour and Japan at next week's Asia-Pacific Open Golf Championship Diamond Cup....
Read more on Sport Balla
 
'No losers, only partners with Afghan unity government'
United Nations, Sep 19 (IANS) Head of the UN Assistance Mission in Afghanistan (UNAMA), Jan Kubis said there is "no better way forward" other than a unity government in the crisis-torn country. "There is no better way...
Read more on Politics Balla