INVN January 2014 Options Begin Trading

Investors in InvenSense, Inc. ( INVN) saw new options begin trading today, for the January 2014 expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the INVN options chain for the new January 2014 contracts and identified one put and one call contract of particular interest.

The put contract at the $15.50 strike price has a current bid of 35 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $15.50, but will also collect the premium, putting the cost basis of the shares at $15.15 (before broker commissions). To an investor already interested in purchasing shares of INVN, that could represent an attractive alternative to paying $17.76/share today.

Because the $15.50 strike represents an approximate 13% 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 77%. 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 2.26% return on the cash commitment, or 22.89% 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 InvenSense, Inc., and highlighting in green where the $15.50 strike is located relative to that history:

If you liked this article you might like

Analysts' Actions -- Ameriprise, Nucor, Boston Beer, Texas Instruments and More

How to Trade Wednesday's Most Active Stocks - InvenSense, Twitter, Finish Line and More

TDK to Purchase InvenSense in $1.3B Cash Deal

TDK Snaps Up Apple Supplier InvenSense for $1.3 Billion

Apple Supplier InvenSense Could Be The Next Takeover Target in Chips