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

2 Updates

Interesting LMCA Put And Call Options For June 21st

Apr 23 2014, 10:58am CDT | by

Investors in Liberty Media Corp (NASD: LMCA) saw new options become available this week, for the June 21st expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the...

Filed under: news

 
 
 

18 weeks ago

Interesting LMCA Put And Call Options For June 21st

Apr 23 2014, 10:58am CDT | by

Investors in Liberty Media Corp (NASD: LMCA) saw new options become available this week, for the June 21st expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the LMCA options chain for the new June 21st contracts and identified one put and one call contract of particular interest.

The put contract at the $125.00 strike price has a current bid of $2.75. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $125.00, but will also collect the premium, putting the cost basis of the shares at $122.25 (before broker commissions). To an investor already interested in purchasing shares of LMCA, that could represent an attractive alternative to paying $128.96/share today.

Because the $125.00 strike represents an approximate 3% 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 65%. 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 2.20% return on the cash commitment, or 13.61% annualized — at Stock Options Channel we call this the YieldBoost.

Click here to find out the Top YieldBoost Puts of the Nasdaq 100 »

Below is a chart showing the trailing twelve month trading history for Liberty Media Corp , and highlighting in green where the $125.00 strike is located relative to that history:

Turning to the calls side of the option chain, the call contract at the $130.00 strike price has a current bid of $3.90. If an investor was to purchase shares of LMCA stock at the current price level of $128.96/share, and then sell-to-open that call contract as a “covered call,” they are committing to sell the stock at $130.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 3.83% 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 LMCA shares really soar, which is why looking at the trailing twelve month trading history for Liberty Media Corp , as well as studying the business fundamentals becomes important. Below is a chart showing LMCA’s trailing twelve month trading history, with the $130.00 strike highlighted in red:

Considering the fact that the $130.00 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 52%. 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 3.02% boost of extra return to the investor, or 18.71% annualized, which we refer to as the YieldBoost.

Click here to find out the Top YieldBoost Calls of the Nasdaq 100 »

The implied volatility in the put contract example is 23%, while the implied volatility in the call contract example is 22%. Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today’s price of $128.96) to be 21%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.

 
Update
2

3 days 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 w ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

4 days 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 t ...
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

IS video shows beheading of second US journalist
Washington, Sep 2 (IANS) Days after the beheading of American photojournalist James Foley, Sunni militant group Islamic State (IS) has posted a video showing the beheading of another kidnapped American journalist Steven Sotloff, CNN reported.
 
 
IS beheads second US journalist
Washington, Sep 2 (IANS) The Islamic State militant organisation has posted a video titled "A second message to America", showing the beheading of American journalist Steven Sotloff, CNN reported.
 
 
India offers red carpet, not red tape, Modi hard sells India (Roundup)
Tokyo, Sep 2 (IANS) Prime Minister Narendra Modi Tuesday hard sold India to Japanese investors saying that his country offers only a red carpet and not red tape while dubbing his five-day trip to Japan that ends Wednesday as "very successful".
 
 
Fear grips onlookers as Ebola victim walks through market
Monrovia, Sep 2 (IANS) A video footage has emerged from Liberia showing a person tagged positive for Ebola virus disease (EVD) walking through a busy market, sending hundreds of horrified onlookers fleeing in fear, a media report said Tuesday.
 
 
 

Latest from the Network

Second beheading plunges Obama into top crisis
Washington, Sep 3 (IANS) Just two weeks after beheading American photojournalist James Foley, the Islamic State (IS) Sunni extremist organisation sent what it called "A second message to America", with a video showing...
Read more on Politics Balla
 
11 killed in Pakistan building collapse
Islamabad, Sep 2 (IANS) At least 11 people, including women and children, were killed Tuesday when a roof of an old building collapsed in Pakistan, a media report said. As many as 18 people were wounded when a two-...
Read more on Politics Balla
 
Imran refuses to budge as parliament supports Pakistan PM (Roundup)
Islamabad, Sep 2 (IANS) Pakistan Tehreek-e-Insaf (PTI) chairman Imran Khan refused to budge on his demand for Prime Minister Nawaz Sharif's resignation Tuesday as a joint session of parliament came out overwhelmingly...
Read more on Politics Balla
 
IS video shows beheading of second US journalist
Washington, Sep 2 (IANS) Days after the beheading of American photojournalist James Foley, Sunni militant group Islamic State (IS) has posted a video showing the beheading of another kidnapped American journalist...
Read more on Ad Balla
 
Modi cites people's efforts for India-Japan strategic ties
Tokyo, Sep 2 (IANS) Prime Minister Narendra Modi Tuesday said India and Japan were now working as "special strategic and global" partners and this was the result of efforts of not just the two governments but because...
Read more on Politics Balla
 
IS beheads second US journalist
Washington, Sep 2 (IANS) The Islamic State militant organisation has posted a video titled "A second message to America", showing the beheading of American journalist Steven Sotloff, CNN reported. The video also...
Read more on Ad Balla
 
Rahane shines as India seal series in Edgbaston
Birmingham, Sep 2 (IANS) Ajinkya Rahane's maiden century and his century-run stand with Shikhar Dhawan powered India to a comprehensive nine-wicket win over England in the fourth ODI here Tuesday and also sealed the...
Read more on Sport Balla
 
India vs England: Scoreboard, fourth ODI
Birmingham, Sep 2 (IANS) The following is the final scoreboard of the fourth ODI between India and England at Edgbaston here Tuesday. England Alastair Cook c Raina b Kumar 9 Alex Hales b Kumar 6 Gary Ballance c Rahane...
Read more on Sport Balla
 
Britain asks citizens to review travel plans to Pakistan
Islamabad, Sep 2 (IANS) The British Foreign and Commonwealth Office (FCO) has advised its citizens to review their planned trips to Pakistan in view of the volatile security situation in the country. "There is a high...
Read more on Politics Balla
 
Jaime King: Motherhood is all that matters
Jaime King says her son is the most important thing in her life now. The 'Sin City: A Dame to Kill For' star welcomed her first child James - her son with husband Kyle Newman - into the world last October and since she...
Read more on Celebrity Balla