Metals Channel
Free Dividend Report - Top Ranked Stocks

Featured MNV Articles:

XME, CDE, RGLD, NEM: ETF Outflow Alert
Thursday, October 10, 11:14 AM ET, by Market News Video Staff

Symbols mentioned in this story: XME, CDE, RGLD, NEM Exchange traded funds (ETFs) trade just ...

Notable Wednesday Option Activity: OMER, CRUS, NEM
Wednesday, October 16, 3:30 PM ET, by Market News Video Staff

Looking at options trading activity among components of the Russell 3000 index, there is noteworthy ...

Notable ETF Outflow Detected - IWS, WELL, EQR, NEM
Monday, October 21, 12:04 PM ET, by Market News Video Staff

Symbols mentioned in this story: IWS, WELL, EQR, NEM Exchange traded funds (ETFs) trade just ...

December 13th Options Now Available For Newmont Goldcorp (NEM)
Thursday, October 31, 11:21 AM ET, by Market News Video Staff

Investors in Newmont Goldcorp Corp (NEM) saw new options become available today, for the December ...

Notable ETF Outflow Detected - USMV, NEM, WM, NEE
Friday, November 1, 11:15 AM ET, by Market News Video Staff

Symbols mentioned in this story: USMV, NEM, WM, NEE Exchange traded funds (ETFs) trade just ...

Interesting NEM Put And Call Options For January 2020

By Metals Channel Staff, Thursday, November 21, 10:51 AM ET
Play Video: How To Sell A PUT


If the video does not load after a few moments, Upgrade to the Latest Flash Player.

Investors in Newmont Goldcorp Corp (NYSE:NEM) saw new options become available today, for the January 2020 expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the NEM options chain for the new January 2020 contracts and identified one put and one call contract of particular interest.

The put contract at the $37.50 strike price has a current bid of 20 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $37.50, but will also collect the premium, putting the cost basis of the shares at $37.30 (before broker commissions). To an investor already interested in purchasing shares of NEM, that could represent an attractive alternative to paying $38.32/share today.

Because the $37.50 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 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 0.53% return on the cash commitment, or 4.53% annualized — at Stock Options Channel we call this the YieldBoost.

Below is a chart showing the trailing twelve month trading history for Newmont Goldcorp Corp, and highlighting in green where the $37.50 strike is located relative to that history:

Turning to the calls side of the option chain, the call contract at the $40.50 strike price has a current bid of 4 cents. If an investor was to purchase shares of NEM stock at the current price level of $38.32/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $40.50. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 5.79% if the stock gets called away at the January 2020 expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if NEM shares really soar, which is why looking at the trailing twelve month trading history for Newmont Goldcorp Corp, as well as studying the business fundamentals becomes important. Below is a chart showing NEM's trailing twelve month trading history, with the $40.50 strike highlighted in red:

Considering the fact that the $40.50 strike represents an approximate 6% premium 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 covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 71%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 0.10% boost of extra return to the investor, or 0.89% annualized, which we refer to as the YieldBoost.

The implied volatility in the put contract example is 64%, while the implied volatility in the call contract example is 63%.

Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 251 trading day closing values as well as today's price of $38.32) to be 27%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.


This Article's Word Cloud:   Arial   Below   Channel   Considering   Corp   Goldcorp   January   Newmont   Options   Should   Start   Stock   YieldBoost   also   call   chart   contract   covered   current   expire   fillColor   greeks   history   implied   investor   left   month   odds   options   premium   price   represent   return   sell   shares   stock   strike   that   they   this   those   today   trading   trailing   twelve   volatility   which   will   worthless   would

Interesting NEM Put And Call Options For January 2020 | www.MetalsChannel.com | Copyright © 2010 - 2020, All Rights Reserved

Nothing in Metals Channel is intended to be investment advice, nor does it represent the opinion of, counsel from, or recommendations by BNK Invest Inc. or any of its affiliates, subsidiaries or partners. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person. All viewers agree that under no circumstances will BNK Invest, Inc,. its subsidiaries, partners, officers, employees, affiliates, or agents be held liable for any loss or damage caused by your reliance on information obtained. By visiting, using or viewing this site, you agree to the following Full Disclaimer & Terms of Use and Privacy Policy. Video widget and metals stock videos powered by Market News Video. Quote data delayed at least 20 minutes; data powered by Ticker Technologies, and Mergent. Contact Metals Channel; Meet Our Editorial Staff.