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IInvestors in CrowdStrike Holdings Inc (ticker: CRWD) saw new options start trading this week, for the January 2022 expiration. At Stock Options Channel, our YieldBoost formula scoured the CRWD options channel for new ones. contracts of January 2022 and identified a put and a call of particular interest.
The contract to sell at the strike price of $ 200.00 has a current bid of $ 12.45. If an investor were to sell to open that sales contract, they agree to buy the stock at $ 200.00, but will also receive the premium, bringing the base cost of the shares to $ 187.55 (before commissions broker). For an investor already interested in buying shares of CRWD, this could represent an attractive alternative to paying $ 201.76 / share today.
Since the strike price of $ 200.00 represents a discount of around 1% from the current share price (in other words, it is out of the money by that percentage), it is also possible that the sales contract expires worthless. Current analytical data (including Greeks and Greeks implied) suggests the current chance of this happening is 56%. The Stock Options Channel will monitor these quotes over time to see how they evolve, by posting a chart of these numbers on our website under the contract detail page for that contract. If the contract expires worthless, the premium would represent a return of 6.22% on the cash commitment, or 46.37% annualized – at Stock Options Channel, we call that the YieldBoost.
Below is a chart showing CrowdStrike Holdings Inc’s past twelve month trading history, and highlighting in green the location of the $ 200.00 exercise against that history:
Turning to the calls side of the options chain, the contract to buy at the strike price of $ 205.00 has a current bid of $ 12.35. If an investor were to buy CRWD shares at the current price level of $ 201.76 / share and then sell to open that purchase contract as a “covered call”, they agree to sell the share at $ 205. . Since the call seller will also receive the premium, this would generate a total return (excluding dividends, if any) of 7.73% if the stock was recalled at the January 2022 expiration (before broker commissions) . Of course, a lot of benefits could be left on the table if CRWD shares really soar, which is why it becomes important to look at the past twelve month trading history of CrowdStrike Holdings Inc, as well as study the fundamentals of the business. Below is a chart showing CRWD’s trading history over the past twelve months, with the $ 205.00 strike highlighted in red:
Since the strike price of $ 205 represents a premium of around 2% over the current share price (in other words, it’s out of the money by that percentage), it is also possible that the covered purchase contract expire worthless, in which case the investor would keep both his shares and the premium received. Current analytical data (including Greeks and Greeks implied) suggests that the current chance of this happening is 50%. On our website, under the contract detail page for that contract, the Stock Options Channel will track these quotes over time to see how they change and publish a chart of those numbers (the option contract’s trading history will be also plotted). If the covered purchase contract expires worthless, the premium would represent an increase of 6.12% in the additional return to the investor, or 45.60% annualized, which we call the YieldBoost.
The implied volatility in the sales contract example is 53%, while the implied volatility in the sales contract example is 54%.
Meanwhile, we calculate the actual volatility of the past twelve months (taking into account the closing values ​​of the last 252 trading days as well as today’s price of $ 201.76) at 50%. For more put and call option contract ideas worth considering, visit StockOptionsChannel.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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