The chart above, and the stock's historical volatility, can be a helpful guide in combination with fundamental analysis to judge whether selling the March put or call options highlighted in this article deliver a rate of return that represents good reward for the risks. We calculate the trailing twelve month volatility for Costco Wholesale Corp (considering the last 251 trading day COST historical stock prices using closing values, as well as today's price of $113.14) to be 15%.
In mid-afternoon trading on Monday, the put volume among S&P 500 components was 725,916 contracts, with call volume at 725,916, for a put:call ratio of 0.71 so far for the day, which is above normal compared to the long-term median put:call ratio of .65. In other words, if we look at the number of call buyers and then use the long-term median to project the number of put buyers we'd expect to see, we're actually seeing more put buyers than expected out there in options trading so far today. Find out which 15 call and put options traders are talking about today.