Investors in Star Scientific, Inc. (STSI) saw new options begin trading this week, for the November 22nd expiration. One of the key data points that goes into the price an option buyer is willing to pay, is the time value, so with 241 days until expiration the newly trading 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 STSI options chain for the new November 22nd contracts and identified the following call contract of particular interest.The call contract at the $1.00 strike price has a current bid of 10 cents. If an investor was to purchase shares of STSI stock at the current price level of $0.83/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $1.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 32.71% if the stock gets called away at the November 22nd expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if STSI shares really soar, which is why looking at the trailing twelve month trading history for Star Scientific, Inc., as well as studying the business fundamentals becomes important. Below is a chart showing STSI's trailing twelve month trading history, with the $1.00 strike highlighted in red:
First Week of November 22nd Options Trading For Star Scientific (STSI)
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