Investors in Derma Sciences Inc. (DSCI) saw new options begin trading today, for the January 2014 expiration. One of the key inputs that goes into the price an option buyer is willing to pay, is the time value, so with 243 days until expiration the newly trading contracts represent a potential 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 DSCI options chain for the new January 2014 contracts and identified the following call contract of particular interest.The call contract at the $15.00 strike price has a current bid of 10 cents. If an investor was to purchase shares of DSCI stock at the current price level of $14.12/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $15.00. Considering the call seller will also collect the premium, that would drive a total return of 6.94% if the stock gets called away at the January 2014 expiration (before broker commissions). If course, a lot of upside could potentially be left on the table if DSCI shares really soar, which is why looking at the trailing twelve month trading history for Derma Sciences Inc., as well as studying the business fundamentals becomes important. Below is a chart showing DSCI's trailing twelve month trading history, with the $15.00 strike highlighted in red:
DSCI January 2014 Options Begin Trading
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