Interesting GNW Put And Call Options For February 7th

Investors in Genworth Financial, Inc. ( GNW) saw new options begin trading today, for the February 7th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the GNW options chain for the new February 7th contracts and identified one put and one call contract of particular interest.

The put contract at the $15.00 strike price has a current bid of 47 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $15.00, but will also collect the premium, putting the cost basis of the shares at $14.53 (before broker commissions). To an investor already interested in purchasing shares of GNW, that could represent an attractive alternative to paying $15.42/share today.

Because the $15.00 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 61%. 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 3.13% return on the cash commitment, or 31.77% 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 Genworth Financial, Inc. , and highlighting in green where the $15.00 strike is located relative to that history:

If you liked this article you might like

Trump's Lattice Deal Block Could Cause Cascade of China Cancellations

Week Ahead: Apple Earnings, Jobs Report on the Docket in Busy Start to May

Week Ahead: Trump Takes the Wheel as Fourth-Quarter Earnings Power On

The Deal's M&A League Tables for 2016: A Solid Sequel to a Blockbuster