10 Updates
First Week of TEL May 17th Options Trading
Photo Credit: Forbes Business

First Week of TEL May 17th Options Trading

Mar 27 2014, 10:17am CDT | by

Investors in TE Connectivity Ltd (NYSE: TEL) saw new options become available this week, for the May 17th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the TEL...

Filed under: news

 
 
 

17 weeks ago

First Week of TEL May 17th Options Trading

Mar 27 2014, 10:17am CDT | by

Investors in TE Connectivity Ltd (NYSE: TEL) saw new options become available this week, for the May 17th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the TEL options chain for the new May 17th contracts and identified one put and one call contract of particular interest.

The put contract at the $55.00 strike price has a current bid of 50 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $55.00, but will also collect the premium, putting the cost basis of the shares at $54.50 (before broker commissions). To an investor already interested in purchasing shares of TEL, that could represent an attractive alternative to paying $59.39/share today.

Because the $55.00 strike represents an approximate 7% 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 81%. 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 0.91% return on the cash commitment, or 6.51% 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 TE Connectivity Ltd, and highlighting in green where the $55.00 strike is located relative to that history:

Turning to the calls side of the option chain, the call contract at the $60.00 strike price has a current bid of $1.55. If an investor was to purchase shares of TEL stock at the current price level of $59.39/share, and then sell-to-open that call contract as a “covered call,” they are committing to sell the stock at $60.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 3.64% if the stock gets called away at the May 17th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if TEL shares really soar, which is why looking at the trailing twelve month trading history for TE Connectivity Ltd, as well as studying the business fundamentals becomes important. Below is a chart showing TEL’s trailing twelve month trading history, with the $60.00 strike highlighted in red:

Considering the fact that the $60.00 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 54%. 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 2.61% boost of extra return to the investor, or 18.68% 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 24%, while the implied volatility in the call contract example is 23%. Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today’s price of $59.39) to be 21%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.

Source: Forbes Business

 
Update
10

7 weeks ago

RM47mil KWSG contributions still unclaimed

Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the Dewa ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
9

7 weeks ago

Gold shop lost almost RM1mil

Jun 9 2014 3:50am CDT | Source: Business Times Malaysia

KANGAR: A gold shop owner lost almost RM1 million after after the safe on in his shop was br ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
8

7 weeks ago

Motion to debate MAS losses in Dewan Rakyat rejected

Jun 9 2014 3:39am CDT | Source: Business Times Malaysia

KUALA LUMPUR: AN emergency motion to debate the losses incurred by Malaysia Airlines last year, amounting to RM1.2 billion was rejected by ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
7

7 weeks ago

MH370 Tragedy: Hisham: RM27.6 mil spent on 1st phase of SAR

Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Minister, Datuk Seri Hishammuddin Huss ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
6

7 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Selatan ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
5

7 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over R ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
4

7 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industry Minister Datuk Seri Mustap ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
3

7 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year involving an allocation of RM20 mil ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
2

7 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan Bazaar Sch ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
1

8 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion Kinrara Damansara Skyway (Kidex) today ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

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

OPEC daily basket price closes tad higher
Vienna, July 30 (IANS) The basket of 12 crude oils of the Organization of Petroleum Exporting Countries (OPEC) stood at $105.44 a barrel Tuesday, against $105.22 last Thursday, according to the OPEC Secretariat.
 
 
Moscow calls US sanctions 'illegitimate'
Moscow, July 30 (IANS) The economic sanctions imposed by the United States are a revenge on Russia, the country's foreign ministry said Wednesday.
 
 
EU boosts funding to fight Ebola epidemic
Brussels, July 30 (IANS) The European Union Wednesday allocated an additional 2 million euros ($2.68 million) in aid to tackle the Ebola epidemic in West Africa.
 
 
Top doctor in Sierra Leone dies of Ebola
Nairobi, July 30 (IANS/EFE) Sierra Leone's top Ebola virus doctor, Sheikh Umar Khan, died a few days after contracting the lethal disease which has claimed the lives of 672 people in Western Africa, health authorities in Sierra Leone announced Wednesday.
 
 
 

Latest from the Network

When Rita Ora forgot her lines
Los Angeles, July 31 (IANS) Singer Rita Ora found acting "difficult" as she kept forgetting her lines while filming her scenes for the upcoming erotica "Fifty Shades of Grey". The 23-year-old singer, who is playing...
Read more on Celebrity Balla
 
Christina Aguilera enjoys whimsical baby shower
Christina Aguilera ''felt so much love'' at her baby shower last weekend. The 33-year-old singer, who is expecting a baby girl with her fiancé, Matthew Rutler, celebrated the impending arrival of her second child with...
Read more on Celebrity Balla
 
Kelsey Grammer forgives sister's killer
Kelsey Grammer testified at a parole hearing for his sister's murderer on Tuesday (07.29.14). The 59-year-old actor, whose wife Katya gave birth to their second child last week, forgave Freddie Glenn for kidnapping and...
Read more on Celebrity Balla
 
Khloé Kardashian blasts Adrienne Bailon
Khloé Kardashian is furious with her friend Adrienne Bailon for branding her younger brother ''disloyal.'' The 'Keeping Up with the Kardashians' star lashed out at the former Cheetah Girls member, 30, on Twitter after...
Read more on Celebrity Balla
 
Kim Kardashian and Kanye West hate being apart
Kim Kardashian and Kanye West enjoy secret date nights at home. The couple, who have been living with the reality TV star's mother Kris Jenner in Calabasas, California since welcoming their daughter, North, into the...
Read more on Celebrity Balla
 
Liam Neelson yet to get over his wife's death
Los Angeles, July 31 (IANS) Actor Liam Neelson still hasn't got over his wife's death whom he lost five years ago. The "Taken" star was left heartbroken when he switched off Natasha Richardson's life support in 2009...
Read more on Celebrity Balla
 
Security Council renews UN mission in Cyprus
United Nations, July 31 (IANS) The UN Security Council (UNSC) Wednesday renewed a UN mission in Cyprus for another six months to continue assisting the parties in the country to bring the division of the island to a...
Read more on Politics Balla
 
Tunisian army chief resigns after soldiers' deaths
Tunis, July 31 (IANS) The Tunisian Army chief,Mohamed Salah Hamdi , has stepped down from his post as the highest commander, the defence ministry confirmed Wednesday. Hamdi had presented his letter of resignation July...
Read more on Politics Balla
 
Commonwealth Games medals tally
Glasgow, July 31 (IANS) England are back at the top of the medals table with 37 gold, 34 silver and 30 bronze in the 20th Commonwealth Games. India are now sixth with a tally of 41 medals, including 10 gold, 19 silver...
Read more on Sport Balla
 
Daniel Radcliffe loved calorific treats
Los Angeles, July 31 (IANS) Actor Daniel Radcliffe enjoyed gorging on calorific treats while filming for "What If". The 25-year-old enjoyed eating special sandwiches, which were made up of a whole loaf of bread, a jar...
Read more on Celebrity Balla