May 23rd Options Now Available For Gilead Sciences (GILD)

Investors in Gilead Sciences, Inc. ( GILD) saw new options begin trading today, for the May 23rd expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the GILD options chain for the new May 23rd contracts and identified one put and one call contract of particular interest.

The put contract at the $67.50 strike price has a current bid of $1.72. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $67.50, but will also collect the premium, putting the cost basis of the shares at $65.78 (before broker commissions). To an investor already interested in purchasing shares of GILD, that could represent an attractive alternative to paying $72.73/share today.

Because the $67.50 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 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 2.55% return on the cash commitment, or 18.60% annualized — at Stock Options Channel we call this the YieldBoost.

Top YieldBoost Puts of the Nasdaq 100 »

Below is a chart showing the trailing twelve month trading history for Gilead Sciences, Inc., and highlighting in green where the $67.50 strike is located relative to that history:

If you liked this article you might like

Don't Get Shaken Out of Good Stocks: Cramer's 'Mad Money' Recap (Wed 9/13/17)

Juno, bluebird In Focus as Targets Following Gilead-Kite Aquisition

Faster Rebuild After Harvey; Micron Tech Breakout Would Be a Win: Best of Cramer