BCO December 20th Options Begin Trading

Investors in Brinks Co ( BCO) saw new options become available today, for the December 20th expiration. One of the key data points that goes into the price an option buyer is willing to pay, is the time value, so with 243 days until expiration the newly available contracts represent a potential opportunity for sellers of puts or calls to achieve a higher premium than would be available for the contracts with a closer expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the BCO options chain for the new December 20th contracts and identified one put and one call contract of particular interest.

The put contract at the $25.00 strike price has a current bid of $1.95. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $25.00, but will also collect the premium, putting the cost basis of the shares at $23.05 (before broker commissions). To an investor already interested in purchasing shares of BCO, that could represent an attractive alternative to paying $25.58/share today.

Because the $25.00 strike represents an approximate 2% 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 57%. 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 7.80% return on the cash commitment, or 11.71% 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 Brinks Co , and highlighting in green where the $25.00 strike is located relative to that history:

If you liked this article you might like

Brink's May Not Truck Ahead Much Longer

What to Watch During the Week: Cramer's 'Mad Money' Recap (Friday 7/7/17)

Cramer: Top 10 Reasons Why the Bull Market Is Mistrusted

Starboard Value's Jeff Smith Is Top Activist for Naming New Board Members

Starboard's Smith Leads Activists in Naming Dissident Directors