360° Coverage : First Week of CHTR December 20th Options Trading

2 Updates

First Week of CHTR December 20th Options Trading

Apr 23 2014, 11:20am CDT | by

Investors in Charter Communications Inc (NASD: CHTR) saw new options begin trading this week, for the December 20th expiration. One of the key data points that goes into the price an option buyer is...

Filed under: news

 
 
 

25 weeks ago

First Week of CHTR December 20th Options Trading

Apr 23 2014, 11:20am CDT | by

Investors in Charter Communications Inc (NASD: CHTR) saw new options begin trading this week, for the December 20th expiration. One of the key data points that goes into the price an option buyer is willing to pay, is the time value, so with 241 days until expiration the newly trading contracts represent a possible opportunity for sellers of puts or calls to achieve a higher premium than would be available for the contracts with a closer expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the CHTR options chain for the new December 20th 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 $9.40. 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 $115.60 (before broker commissions). To an investor already interested in purchasing shares of CHTR, that could represent an attractive alternative to paying $127.80/share today.

Because the $125.00 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 58%. 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 7.52% return on the cash commitment, or 11.39% 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 Charter Communications Inc, 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 $10.10. If an investor was to purchase shares of CHTR stock at the current price level of $127.80/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 9.62% if the stock gets called away at the December 20th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if CHTR shares really soar, which is why looking at the trailing twelve month trading history for Charter Communications Inc, as well as studying the business fundamentals becomes important. Below is a chart showing CHTR’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 2% 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 48%. 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 7.90% boost of extra return to the investor, or 11.97% 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 27%, while the implied volatility in the call contract example is 28%. Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today’s price of $127.80) to be 25%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.

 
Update
2

7 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 ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

7 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 tragedies of MH370 and MH17" hits hom ...
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

US plane on secret mission returns to Earth
Los Angeles, Oct 18 (IANS) After spending about 22 months orbiting the Earth on a secret mission, a US Air Force X-37B unmanned, reusable space plane has finally returned.
 
 
Smoking during pregnancy alters newborn's DNA
New York, Oct 18 (IANS) Babies born to mothers who smoke during pregnancy may find it difficult to cope with stressors of daily life later due to an alteration in DNA of a gene that regulates passage of stress hormones from mother to foetus, a study says.
 
 
First hydrogen-deficient supernova progenitor traced
Tokyo, Oct 18 (IANS) In a finding that may have important implications for the evolution of massive stars, a group of researchers presented a model that provides the first characterisation of the progenitor (parent) of a hydrogen-deficient supernova.
 
 
Britain to expand Ebola screening beyond London
London, Oct 18 (IANS) British health authorities have said that screening of passengers arriving from regions affected by the Ebola outbreak will be extended to the Manchester and Birmingham airports.
 
 
 

Latest from the Network

Bush shoe-tossing painting hits record at Doha auction
Doha, Oct 15 (IANS/EFE) A controversial painting by Iranian artist Mahmud Obaidi, depicting an Iraqi journalist throwing shoe in 2008 at then US president George W. Bush, was sold for $62,500 at a Sotheby's auction in...
Read more on Celebrity Balla
 
US offers $45 mn bounty for eight terror leaders
Washington, Oct 15 (IANS) The US said Tuesday it is offering rewards totalling up to 45 million dollars for information on eight key leaders of the Al Qaeda in the Arabian Peninsula (AQAP) terrorist organisation. The...
Read more on Politics Balla
 
UNSC extends peacekeeping mission's term in Abyei
United Nations, Oct 15 (IANS) The UN Security Council (UNSC) has renewed the mandate of the UN peacekeeping mission in the Abyei border region between Sudan and South Sudan. In an unanimously adopted resolution, the...
Read more on Politics Balla
 
Ebola cases in West Africa could reach 10,000 per week: WHO
Geneva, Oct 15 (IANS) The World Health Organisation (WHO) has warned that the Ebola epidemic in West Africa could reach 5,000 to 10,000 cases per week by the first week of December. "Quite frankly, ladies and...
Read more on Business Balla
 
Turkey, Singapore sign strategic partnership agreement
Ankara, Oct 15 (IANS) Turkey and Singapore have signed a strategic partnership agreement to boost economic, political and cultural cooperation, as well as security collaboration, during the official visit of...
Read more on Politics Balla
 
Christina Aguilera is returning to 'The Voice' USA
Christina Aguilera will return to 'The Voice' USA next year. The 'Your Body' hitmaker, who previously shared a rotating spot on the judging panel with Shakira, has been replaced by Gwen Stefani this season as she is...
Read more on Celebrity Balla
 
Kesha's music producer hits back
Kesha is being countersued by her record company boss, Dr. Luke. The 41-year-old music producer, who runs Kemosabe Records, claims the 27-year-old 'Tik Tok' singer is a liar and is trying to extort him after she accused...
Read more on Celebrity Balla
 
Jason Derulo won't get back together with Jordin Sparks
Jason Derulo insists his split from Jordin Sparks is permanent. The 'Talk Dirty' hitmaker, who recently ended his relationship with the 'No Air' singer after three years of dating, has ruled out getting back together...
Read more on Celebrity Balla
 
Josh Groban feels 'very lucky' to be dating Kat Dennings
Josh Groban feels ''very lucky'' to be dating Kat Dennings. The 'Brave' hitmaker was very nervous before singing in front of the '2 Broke Girls' actress for the first time at the Carousel of Hope Ball in Beverly Hills,...
Read more on Celebrity Balla
 
Australian Richard Flanagan wins 2014 Man Booker prize
London, Oct 15 (IANS) The first Man Booker prize to allow American nominees was Tuesday night won by an Australian, with Richard Flanagan triumphing for a novel of love and war that tells the harrowing stories of...
Read more on Celebrity Balla