Interesting SUSQ Put For October 19th

Investors in Susquehanna Bancshares, Inc ( SUSQ) saw new options become available this week, for the October 19th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the SUSQ options chain for the new October 19th contracts and identified the following put contract of particular interest.

The put contract at the $12.50 strike price has a current bid of 10 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $12.50, but will also collect the premium, putting the cost basis of the shares at $12.40 (before broker commissions). To an investor already interested in purchasing shares of SUSQ, that could represent an attractive alternative to paying $13.28/share today.

Because the $12.50 strike represents an approximate 6% 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 71%. 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 0.80% return on the cash commitment, or 4.95% annualized — at Stock Options Channel we call this the YieldBoost.

START SLIDESHOW:
Top YieldBoost Puts of the S&P 500 »

Below is a chart showing the trailing twelve month trading history for Susquehanna Bancshares, Inc, and highlighting in green where the $12.50 strike is located relative to that history:

If you liked this article you might like

Regional Banks Eying Community Banks for Acquisitions

BB&T’s Green Light from the Fed Opens Up Fast Lane to Bank Deals

Tomorrow's Ex-Dividends To Watch: MTR, IRT, SUSQ

3 High-Dividend Stocks That Can Handily Beat the Market

Breaking Up Big Banks Is Hard to Do. But Not Impossible