First Week Of ALSK November 16th Options Trading

Investors in Alaska Communications Systems Group Inc (ALSK) saw new options begin trading this week, for the November 16th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the ALSK options chain for the new November 16th contracts and identified the following put contract of particular interest.

The put contract at the $2.50 strike price has a current bid of 15 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $2.50, but will also collect the premium, putting the cost basis of the shares at $2.35 (before broker commissions). To an investor already interested in purchasing shares of ALSK, that could represent an attractive alternative to paying $2.68/share today.

Because the $2.50 strike represents an approximate 7% 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 64%. 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 6.00% return on the cash commitment, or 43.76% 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 Alaska Communications Systems Group Inc, and highlighting in green where the $2.50 strike is located relative to that history:

Loading+chart++2013+TickerTech.com

The implied volatility in the put contract example above is 71%. Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 250 trading day closing values as well as today's price of $2.68) to be 61%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.

null

More from Stocks

With GE Dropped From the Dow, Be Selective About Industrials Stocks

With GE Dropped From the Dow, Be Selective About Industrials Stocks

Dow Rises as Blue-Chip Index Looks to End Losing Streak

Dow Rises as Blue-Chip Index Looks to End Losing Streak

3 Ways to Fix Starbucks Biggest Challenges

3 Ways to Fix Starbucks Biggest Challenges

General Electric's Boot From the Dow: Is This as Bad as It Can Get?

General Electric's Boot From the Dow: Is This as Bad as It Can Get?

News From Starbucks and General Electric Leaves Their Investors Up in Arms

News From Starbucks and General Electric Leaves Their Investors Up in Arms