Investors in Dolan Company (DM) saw new options become available this week, for the July 19th expiration. One of the key inputs that goes into the price an option buyer is willing to pay, is the time value, so with 193 days until expiration the newly available 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 DM options chain for the new July 19th contracts and identified the following call contract of particular interest.The call contract at the $2.50 strike price has a current bid of 5 cents. If an investor was to purchase shares of DM stock at the current price level of $0.53/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $2.50. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 377.62% if the stock gets called away at the July 19th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if DM shares really soar, which is why looking at the trailing twelve month trading history for Dolan Company , as well as studying the business fundamentals becomes important. Below is a chart showing DM's trailing twelve month trading history, with the $2.50 strike highlighted in red:
First Week of July 19th Options Trading For Dolan Company (DM)
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