Investors in Denny's Corp (DENN) saw new options become available this week, for the August 16th expiration. One of the key inputs that goes into the price an option buyer is willing to pay, is the time value, so with 218 days until expiration the newly available 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 DENN options chain for the new August 16th contracts and identified the following call contract of particular interest.The call contract at the $7.50 strike price has a current bid of 25 cents. If an investor was to purchase shares of DENN stock at the current price level of $6.94/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $7.50. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 11.67% if the stock gets called away at the August 16th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if DENN shares really soar, which is why looking at the trailing twelve month trading history for Denny's Corp, as well as studying the business fundamentals becomes important. Below is a chart showing DENN's trailing twelve month trading history, with the $7.50 strike highlighted in red:
First Week of August 16th Options Trading For Denny's (DENN)
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