360° Coverage : June 21st Options Now Available For Northrop Grumman (NOC)

1 Updates

June 21st Options Now Available For Northrop Grumman (NOC)

Apr 21 2014, 11:37am CDT | by

Investors in Northrop Grumman Corp (NYSE: NOC) saw new options begin trading today, for the June 21st expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the NOC...

Filed under: news

 
 
 

27 weeks ago

June 21st Options Now Available For Northrop Grumman (NOC)

Apr 21 2014, 11:37am CDT | by

Investors in Northrop Grumman Corp (NYSE: NOC) saw new options begin trading today, for the June 21st expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the NOC options chain for the new June 21st contracts and identified one put and one call contract of particular interest.

The put contract at the $120.00 strike price has a current bid of $3.20. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $120.00, but will also collect the premium, putting the cost basis of the shares at $116.80 (before broker commissions). To an investor already interested in purchasing shares of NOC, that could represent an attractive alternative to paying $121.84/share today.

Because the $120.00 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 57%. 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 2.67% return on the cash commitment, or 15.96% 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 Northrop Grumman Corp, and highlighting in green where the $120.00 strike is located relative to that history:

Turning to the calls side of the option chain, the call contract at the $125.00 strike price has a current bid of $2.20. If an investor was to purchase shares of NOC stock at the current price level of $121.84/share, and then sell-to-open that call contract as a “covered call,” they are committing to sell the stock at $125.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 4.40% if the stock gets called away at the June 21st expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if NOC shares really soar, which is why looking at the trailing twelve month trading history for Northrop Grumman Corp, as well as studying the business fundamentals becomes important. Below is a chart showing NOC’s trailing twelve month trading history, with the $125.00 strike highlighted in red:

Considering the fact that the $125.00 strike represents an approximate 3% 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 62%. 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 1.81% boost of extra return to the investor, or 10.80% 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 21%, while the implied volatility in the call contract example is 20%. Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 251 trading day closing values as well as today’s price of $121.84) to be 17%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.

 
Update
1

8 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 sla ...
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

Snoring masks don't kill sex life: Study
New York, Oct 28 (IANS) A common therapy to tackle obstructive sleep apnea (OSA) does not become a hindrance between the sheets, says a study, allaying fears of OSA patients who believe the therapy interferes with sex.
 
 
Advanced hearing aids distort music more
New York, Oct 28 (IANS) The more advanced an hearing aid is today, the worse experience it would offer to music lovers who use such aids, says a study.
 
 
Hair disorder could signal dental decay
Washington, Oct 28 (IANS) If you are experiencing hair fall problems, your teeth may require extra care as researchers have found that hair disorder could increase risk of dental decay.
 
 
Three Red Cross workers cleared of Ebola in New Zealand
Wellington, Oct 28 (IANS) Three New Zealand Red Cross healthcare workers have been cleared of possible Ebola infection after being put on "self-monitoring" since returning from working in Ebola-affected countries in West Africa, Health Minister Jonathan Coleman said Tuesday.
 
 
 

Latest from the Network

MIT survey reveals sexual assault on campus
New York, Oct 28 (IANS) Nearly 17 percent of female and five percent of male undergraduate students at the Massachusetts Institute of Technology (MIT) have revealed that they were sexually assaulted on the campus, said...
Read more on Politics Balla
 
Flashlight apps stealing your data?
New York, Oct 28 (IANS) Do you use a flashlight app on your smartphone? Security experts warn that free flashlight apps are secretly recording sensitive information from your phone. According to a US-based security...
Read more on Politics Balla
 
People flee as lava reaches Hawaiian village
Honolulu, Oct 28 (IANS) Many residents of a Hawaiian village have fled their homes, threatended by the flow of lava from Kilauea Volcano, a media report said Tuesday. People at Pahoa are running away as the lava from...
Read more on Politics Balla
 
When Anne Hathaway freaked out
Los Angeles, Oct 28 (IANS) Anne Hathaway plays an astronaut in her forthcoming film "Interstellar" and the actress says wearing a spacesuit for the first time wasn't a great experience. "When I stepped on the set, I...
Read more on Celebrity Balla
 
Sienna Miller, Tom Sturridge played cupid for Pattinson
Los Angeles, Oct 28 (IANS) Sienna Miller and Tom Sturridge were instrumental in introducing actor Robert Pattinson to his current girlfriend - singer FKA Twigs. Pattinson, Miller and Sturridge all went to see Twigs in...
Read more on Celebrity Balla
 
Megan Fox misses premiere
Megan Fox was forced to miss the Beijing premiere of 'Teenage Mutant Ninja Turtles' after being stricken by an allergic reaction. The 28-year-old beauty - who plays April O'Neil in the new movie - had joined co-star...
Read more on Movie Balla
 
British doctor 'killed without legal justification' in Syria: Jury
London, Oct 28 (IANS) A doctor from south London was "killed without any legal justification" in a jail cell in Syria, an inquest jury has said. The jury at the Royal Courts of Justice said Monday, Abbas Khan, a 32...
Read more on Politics Balla
 
ICC forced to clamp down on chucking: Dave Richardson
Sydney, Oct 28 (IANS) International Cricket Council (ICC) chief executive Dave Richardson said Tuesday the game had reached the "straw that broke the camel's back" with suspect bowling actions, forcing the governing...
Read more on Sport Balla
 
Blue or yellow ribbon? Protests divide Hong Kong society
Hong Kong, Oct 28 (IANS/EFE) The yellow ribbons of pro-democracy protesters and the blue ribbons of their opponents symbolise the division in Hong Kong over the "umbrella revolution" which is about to complete a month...
Read more on Politics Balla
 
N-deal possible in a month: Iranian president
Tehran, Oct 28 (IANS) Iranian President Hassan Rouhani has said that a final nuclear deal between Tehran and the six world powers may be possible within a month. In a meeting with Norwegian Ambassador to Tehran...
Read more on Business Balla