FedEx Corp Options for October 24th: Put and Call Contracts

FedEx Corp (FDX) options have seen new trading for October 24th expiration. A put contract at $220.00 has a current bid of $10.50, while a call contract at $225.00 has a bid of $10.40. Selling-to-open the put contract would commit to purchasing shares at $220.00 with a cost basis of $209.50, while selling-to-open the call contract would commit to selling shares at $225.00. The current odds of the put contract expiring worthless are 56%.

Investors in FedEx Corp (FDX) now have access to new options contracts set to expire on October 24th. The options chain includes a put contract at a $220.00 strike price and a call contract at a $225.00 strike price, both with current bids of $10.50 and $10.40, respectively [1].

The put contract at $220.00 offers an interesting opportunity. If an investor sells-to-open this put contract, they commit to purchasing shares at $220.00 but collect a premium of $10.50, lowering the effective cost basis to $209.50 (before broker commissions). This represents a potential 1% discount to the current trading price of $221.63, making it an attractive alternative for investors interested in purchasing shares [1].

The put contract is out-of-the-money by approximately 1%, and there is a 56% chance it will expire worthless [1]. In this scenario, the premium collected would represent a 4.77% return on the cash commitment, or 34.84% annualized, which Stock Options Channel refers to as the YieldBoost.

On the call side, the $225.00 strike price represents an approximate 2% premium to the current trading price of $221.63. Selling-to-open this call contract as a "covered call" would commit the investor to selling shares at $225.00, with the premium collected. This strategy could yield a total return (excluding dividends) of 6.21% if the stock gets called away at expiration [1].

The call contract is also out-of-the-money by approximately 2%, with a 50% chance of expiring worthless [1]. In this case, the investor would keep their shares and the premium collected, representing a 4.69% boost to their return, or 34.26% annualized, also referred to as the YieldBoost.

Both contracts exhibit implied volatilities of 38% and 37%, respectively, while the actual trailing twelve month volatility is 36% [1].

Investors should consider these options contracts as part of their broader strategy, keeping in mind the risks and potential rewards. For more put and call options contract ideas, visit StockOptionsChannel.com [1].

References:
[1] https://www.nasdaq.com/articles/interesting-fdx-put-and-call-options-october-24th