360° Coverage : Interesting JWN Put And Call Options For June 21st

2 Updates

Interesting JWN Put And Call Options For June 21st

Apr 21 2014, 11:38am CDT | by

Investors in Nordstrom, Inc. (NYSE: JWN) saw new options become available today, for the June 21st expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the JWN options...

Filed under: news

 
 
 

23 weeks ago

Interesting JWN Put And Call Options For June 21st

Apr 21 2014, 11:38am CDT | by

Investors in Nordstrom, Inc. (NYSE: JWN) saw new options become available today, for the June 21st expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the JWN options chain for the new June 21st contracts and identified one put and one call contract of particular interest.

The put contract at the $60.00 strike price has a current bid of $1.93. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $60.00, but will also collect the premium, putting the cost basis of the shares at $58.07 (before broker commissions). To an investor already interested in purchasing shares of JWN, that could represent an attractive alternative to paying $60.66/share today.

Because the $60.00 strike represents an approximate 1% 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 55%. 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 3.22% return on the cash commitment, or 19.25% 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 Nordstrom, Inc., and highlighting in green where the $60.00 strike is located relative to that history:

Turning to the calls side of the option chain, the call contract at the $62.50 strike price has a current bid of $1.20. If an investor was to purchase shares of JWN stock at the current price level of $60.66/share, and then sell-to-open that call contract as a “covered call,” they are committing to sell the stock at $62.50. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 5.01% 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 JWN shares really soar, which is why looking at the trailing twelve month trading history for Nordstrom, Inc., as well as studying the business fundamentals becomes important. Below is a chart showing JWN’s trailing twelve month trading history, with the $62.50 strike highlighted in red:

Considering the fact that the $62.50 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 63%. 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 1.98% boost of extra return to the investor, or 11.84% 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 22%, while the implied volatility in the call contract example is 21%. Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 251 trading day closing values as well as today’s price of $60.66) to be 17%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.

 
Update
2

4 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 slash ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

4 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 traged ...
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

Serious about taking forward civil nuclear deal: Modi
Washington, Sep 30 (IANS) Prime Minister Narendra Modi said Tuesday that he has conveyed to US President Barack Obama that India is "serious about taking forward" the civil nuclear deal with the US and resolving issues.
 
 
Sought access for Indian companies to American markets: Modi
Washington, Sep 30 (IANS) Prime Minister Narendra Modi said Tuesday that he has urged US President Barack Obama to take steps that would help Indian service companies get access to the US economy.
 
 
Unique 'signature' found in ageing brain
London, Sep 30 (IANS) In a discovery that may lead to treatments that can slow or reverse cognitive decline in the elderly, researchers have found evidence of a unique "signature" in the ageing brain.
 
 
Why drinking makes a smile more contagious among men
New York, Sep 30 (IANS) Alcohol induces a sort of "social bravery" among men, disrupting processes that would normally prevent them from responding to another person's smile, says an interesting study.
 
 
 

Latest from the Network

Hong Kong students threaten to occupy government offices
Hong Kong, Sep 30 (IANS/EFE) Student demonstrators have decided to step up their street protests and are planning to eventually take over and occupy government offices, leaders of the Hong Kong Federation of Students...
Read more on Politics Balla
 
US slaps sanctions on Pakistan-based terror groups
Washington, Sep 30 (IANS) The US Tuesday targeted two terrorist groups based in Pakistan by slapping sanctions on their leader and financial supporters. The Department of Treasury branded Fazl-ur Rehman Khalil, the...
Read more on Politics Balla
 
Elton John performed at Neil Patrick Harris' wedding
Neil Patrick Harris has revealed Sir Elton John gave a surprise performance at his wedding. The 'Gone Girl' star tied the knot with his long-term partner David Burtka at a castle near Perugia in Italy on September 6 and...
Read more on Celebrity Balla
 
Molly Sims pregnant again
Molly Sims is pregnant with her second child. The model-and-actress has announced she is expecting another baby with her husband, film producer Scott Stuber, and she can't wait for their two-year-old son Brooks to...
Read more on Celebrity Balla
 
Sadie Frost says Kate Moss oozes 'sex'
Sadie Frost thinks Kate Moss ''radiates sex''. The 49-year-old actress-and-producer has been friends with the supermodel for decades and says her aura has an permanently erotic element to it. Speaking to the new issue...
Read more on Celebrity Balla
 
Hamas wants Islamic state on all Palestinian lands: Official
Gaza, Sep 30 (IANS) A senior Hamas official announced Tuesday that his movement still believes in establishing an Islamic state on all the lands of Palestine. Mahmoud al-Zahar, the Hamas strongman, said in a ceremony...
Read more on Politics Balla
 
Asian Games: Indian men and women in semifinals
Incheon, Sep 30 (IANS) The Indian men and women's kabaddi teams made it to the semifinals of the 17th Asian Games after topping their respective groups here Tuesday. The men's team, record six time champions, brushed...
Read more on Sport Balla
 
Israeli settlers seize houses in east Jerusalem
Jerusalem, Sep 30 (IANS) Dozens of Jewish settlers, escorted by heavy police force, took over at least seven empty buildings in the Palestinian neighbourhood of Silwan in east Jerusalem Tuesday. The buildings are...
Read more on Politics Balla
 
Indian men paddlers in Asiad pre-quarters
Incheon, Sep 30 (IANS) Indian men paddlers advanced to the doubles pre-quarterfinals after winning their respective matches of the 17th Asian Games at the Suwon Gymnasium here Tuesday. First up, the pair of Achanta...
Read more on Sport Balla
 
IS releases third video of British hostage
Beirut, Sep 30 (IANS/EFE) The Islamic State (IS) Sunni radical organisation has published a third video of British journalist and hostage John Cantlie in which he criticizes US President President Barack Obama's...
Read more on Politics Balla