Investors in pSivida Corp ( PSDV) saw new options begin trading this week, for the January 2018 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 238 days until expiration the newly trading contracts represent a possible 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 PSDV options chain for the new January 2018 contracts and identified the following call contract of particular interest.

The call contract at the $2.50 strike price has a current bid of 55 cents. If an investor was to purchase shares of PSDV stock at the current price level of $2.19/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $2.50. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 39.27% if the stock gets called away at the January 2018 expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if PSDV shares really soar, which is why looking at the trailing twelve month trading history for pSivida Corp, as well as studying the business fundamentals becomes important. Below is a chart showing PSDV's trailing twelve month trading history, with the $2.50 strike highlighted in red:

If you liked this article you might like

Today's Weak On High Volume Stock: PSivida (PSDV)

Trade-Ideas: PSivida (PSDV) Is Today's Strong On High Relative Volume Stock

Psivida (PSDV) Upgraded From Sell to Hold

Why pSivida (PSDV) Stock Is Soaring in After-Hours Trading Today

3 Stocks Under $10 Moving Higher