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

 
 
 

38 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

7 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 ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

7 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 MH17" hits home ...
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

EU strengthens sanctions against Syria
Brussels, Oct 21 (IANS) The European Union (EU) Monday announced it was strengthening sanctions against Syria.
 
 
Lufthansa pilots' strike causes 1,500 flight cancellations
Berlin, Oct 21 (IANS) German airline Lufthansa cancelled over 1,500 flights Monday after its pilots union announced to extend the 35-hour strike to include long-haul fleets.
 
 
Norwegian doctor recovers from Ebola infection, discharged
Oslo, Oct 21 (IANS) A Norwegian doctor, who was infected with the Ebola virus in Sierra Leone, has been discharged from hospital after recovery from the deadly disease, doctors at Oslo's Ulleval hospital said.
 
 
'Lebanon at a high risk for Ebola'
Beirut, Oct 21 (IANS) Lebanon is at a high risk of being affected by deadly Ebola virus, which has ravaged parts of West Africa and prompted a worldwide health scare, the country's health minister said Monday.
 
 
 

Latest from the Network

1,074 new dengue cases in Chinese province
Beijing, Oct 18 (IANS) China's Guangdong province has reported 1,047 new cases of dengue fever, health authorities said Saturday. Six people have already died in Guangdong -- five in Guangzhou and one in adjacent...
Read more on Business Balla
 
Blake Lively 'always' wanted to be mum
Blake Lively has ''always'' wanted to be a mother. The 27-year-old actress is expecting her first child with husband Ryan Reynolds and she admits she's been dreaming of this moment since she was a youngster. Speaking...
Read more on Celebrity Balla
 
Kris Jenner 'torn apart' by Bruce's new relationship
Kris Jenner feels ''torn apart and angry'' that Bruce Jenner is dating her former assistant. The 58-year-old matriarch split from the 64-year-old Olympic gold medalist last October following 22-years of marriage but is...
Read more on Celebrity Balla
 
Cheryl Fernandez-Versini won't move to France
Cheryl Fernandez-Versini doesn't want to move to her husband's home country of France. The 'X Factor' judge, 31, who comes from Newcastle, is adamant she won't be relocating any time soon to suit her new spouse Jean-...
Read more on Celebrity Balla
 
Lance Bass sets wedding date
Lance Bass has set a date for his wedding. The former *NSYNC singer and his partner Michael Turchin, who have been dating for two-and-a-half years, are to tie the knot on December 20, 2014, a representative for the...
Read more on Celebrity Balla
 
Nepal avalanche toll reaches 39
Kathmandu, Oct 18 (IANS) At least 39 climbers died while hiking on a key Nepali route after it was hit by a major snowstorm and avalanches earlier this week, BBC reported Saturday citing officials. Over 350 stranded...
Read more on Politics Balla
 
Jake Gyllenhaal says society is complicit in 'nightcrawling'
Jake Gyllenhaal says almost everybody in society ought to relate to his new movie 'Nightcrawlers'. The eagerly-awaited film concerns those people who monitor police scanners and then race to crime scenes to film eye-...
Read more on Movie Balla
 
India eves look for first win in AFC U-16 qualifiers
Dhaka, Oct 18 (IANS) India will hope to register their first win of the 2015 Asian Football Confederation (AFC) Under-16 Women's Championship qualifiers when they take on hosts Bangladesh in a crucial encounter at the...
Read more on Sport Balla
 
Moyes mulling return to management
London, Oct 18 (IANS) Former Manchester United manager David Moyes said that he is ready to revive his managerial career six months after being sacked by the 'Red Devils'. "I am ready to return. I have enjoyed the...
Read more on Sport Balla
 
Ebola fears loom over Ghana hosting AFCON
Accra (Ghana), Oct 18 (IANS) The Ghana Medical Association (GMA) cautioned the government Saturday against hosting the 2015 African Cup of Nations (AFCON), despite a request by the Confederation of African Football (...
Read more on Sport Balla