Interesting MAA Put For August 17th

Investors in Mid-America Apartment Communities Inc ( MAA) saw new options become available today, for the August 17th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the MAA options chain for the new August 17th contracts and identified the following put contract of particular interest.

The put contract at the $60.00 strike price has a current bid of 55 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $60.00, but will also collect the premium, putting the cost basis of the shares at $59.45 (before broker commissions). To an investor already interested in purchasing shares of MAA, that could represent an attractive alternative to paying $61.79/share today.

Because the $60.00 strike represents an approximate 3% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 62%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 0.92% return on the cash commitment, or 6.20% annualized — at Stock Options Channel we call this the YieldBoost.

START SLIDESHOW:
Top YieldBoost Puts of the REITs »

Below is a chart showing the trailing twelve month trading history for Mid-America Apartment Communities Inc, and highlighting in green where the $60.00 strike is located relative to that history:

Loading+chart++2013+TickerTech.com

The implied volatility in the put contract example above is 22%. Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 248 trading day closing values as well as today's price of $61.79) to be 14%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.

null

If you liked this article you might like

'Mad Money' Lightning Round: Jim Cramer Favors Arconic Over Alcoa

'Mad Money' Lightning Round: Jim Cramer Favors Arconic Over Alcoa

Jim Cramer's 'Mad Money' Recap: Sloppiness Causing Investors to Lose Focus

Jim Cramer's 'Mad Money' Recap: Sloppiness Causing Investors to Lose Focus

Mid-America Apartment (MAA) Stock Price Target Cut at Raymond James

Mid-America Apartment (MAA) Stock Price Target Cut at Raymond James

Record Trifecta for Benchmark Indexes as Crude Rallies Again

Record Trifecta for Benchmark Indexes as Crude Rallies Again

S&P 500 on Track for Record Close as Crude Closes Higher

S&P 500 on Track for Record Close as Crude Closes Higher