Interesting RPM Put Options For December 21st

Investors in RPM International Inc (RPM) saw new options begin trading today, for the December 21st expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the RPM options chain for the new December 21st contracts and identified the following put contract of particular interest.

The put contract at the $35.00 strike price has a current bid of 30 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $35.00, but will also collect the premium, putting the cost basis of the shares at $34.70 (before broker commissions). To an investor already interested in purchasing shares of RPM, that could represent an attractive alternative to paying $37.32/share today.

Because the $35.00 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 76%. 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 0.86% return on the cash commitment, or 5.13% annualized — at Stock Options Channel we call this the YieldBoost.

START SLIDESHOW:
Top YieldBoost Puts of S.A.F.E. Dividend Stocks »

Below is a chart showing the trailing twelve month trading history for RPM International Inc , and highlighting in green where the $35.00 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 249 trading day closing values as well as today's price of $37.32) to be 19%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.

null

More from Stocks

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

Facebook Messenger Could Bring in Billions of Dollars -- Here's How

Facebook Messenger Could Bring in Billions of Dollars -- Here's How

How to Invest in Cannabis - In Its Many Forms

How to Invest in Cannabis - In Its Many Forms

5 Stocks That Are Screaming Buys Right Now

5 Stocks That Are Screaming Buys Right Now