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

1 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

 
 
 

26 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
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 slashing the workforce of 20,000 by ...
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

UN chief voices concern over Ebola-related restrictions
United Nations, Oct 28 (IANS) UN Secretary-General Ban Ki-moon has expressed concern about restrictions imposed by several countries and localities on travelers from major Ebola-affected countries, a spokesperson said here Monday.
 
 
Top US envoy to visits Liberia for Ebola talks
Monrovia, Oct 28 (IANS) The American Ambassador to the United Nations, Samantha Power, is expected to arrive in Monrovia, Liberia Tuesday as part of a tour to the three countries most affected by the Ebola epidemic.
 
 
US troops on anti-Ebola mission under observation in Italy
Washington, Oct 28 (IANS/EFE) A group of US soldiers on a mission in Liberia to fight Ebola are currently under preventive observation at the military base in Vicenza, Italy, military officials said.
 
 
Uganda sends more medical personnel to Ebola-hit West Africa
Kampala, Oct 28 (IANS) Uganda has sent additional 30 health workers to Ebola-hit West African countries to help combat the deadly hemorrhagic fever that has left thousands of people dead, a top government official said here Monday.
 
 
 

Latest from the Network

Shakira to launch toy line
Los Angeles, Oct 28 (IANS) Pop star Shakira is working on a range of baby toys, which will go on sale next month. The pregnant singer, who also has 21-month-old son Milan with boyfriend Gerard Pique, has teamed up...
Read more on Celebrity Balla
 
US troops on anti-Ebola mission under observation in Italy
Washington, Oct 28 (IANS/EFE) A group of US soldiers on a mission in Liberia to fight Ebola are currently under preventive observation at the military base in Vicenza, Italy, military officials said. US Gen. Darryl...
Read more on Politics Balla
 
Uganda sends more medical personnel to Ebola-hit West Africa
Kampala, Oct 28 (IANS) Uganda has sent additional 30 health workers to Ebola-hit West African countries to help combat the deadly hemorrhagic fever that has left thousands of people dead, a top government official said...
Read more on Business Balla
 
Uganda contains deadly Marburg outbreak
Kampala, Oct 28 (IANS) Uganda's health ministry Monday announced that it has contained the deadly Marburg outbreak which killed one health worker and left over 150 people quarantined. Jane Ruth Aceng, the Director...
Read more on Business Balla
 
Five killed in bomb attack in Baghdad
Baghdad, Oct 28 (IANS) At least five people were killed and 32 others wounded in a car bomb attack in the Iraqi capital city of Baghdad Monday evening, a police source said. A car bomb went off near a popular market...
Read more on Politics Balla
 
Hugh Jackman treated for third bout of skin cancer
Hugh Jackman has reportedly been treated for skin cancer for the third time. The 46-year-old actor recently underwent treatment for his third bout of basal cell carcinoma (BCC) in the space of 12 months. The 'Wolverine...
Read more on Celebrity Balla
 
Rihanna 'not looking' for a boyfriend
Rihanna isn't looking for a man. The 'Diamonds' hitmaker - who is currently single after splitting up from rapper Drake - has admitted she isn't looking for a boyfriend. Speaking at the launch of her new male fragrance...
Read more on Celebrity Balla
 
Mila Kunis's 'incredible baby journey'
Mila Kunis thinks having a baby is the ''start of an incredible journey''. The new mum - who recently had Wyatt Isabelle with fiancé Ashton Kutcher - has revealed that she marked the occasion by collaborating with...
Read more on Celebrity Balla
 
Sir Paul McCartney surprises college students
Sir Paul McCartney surprised students at a Florida college. The event where the 72-year-old Beatles frontman appeared was kept secret from the students until the last minute. Paul said: ''Doing this for the students was...
Read more on Celebrity Balla
 
'X Factor': Mel B cried out on Jake's elimination
London, Oct 28 (IANS) "X Factor" judge Mel B stormed off the stage in tears after Jake Quickenden was voted out of the competition. The former spice girl sent production staff into a panic before ITV2 sister show "...
Read more on Celebrity Balla