Encompass Health Options Trading Begins; Discounts Highlighted

Encompass Health Corp sees new options trading with a focus on the $95 put and $100 call contracts, offering potential yields for investors. Analysts note a 68% chance of the put expiring worthless and a 48% chance for the call.

Date: 20-03-2025

AI Rating: 7

Options Trading Highlights for Encompass Health Corp

Investors in Encompass Health Corp (EHC) are presented with new trading opportunities through options that could significantly affect the stock price. The trading of new options includes a put contract at the $95.00 strike price and a call contract at the $100.00 strike price. The $95.00 put represents a 4% discount to the current trading price, which may attract investors looking for cheaper entry points into the stock.

The attractive alternative offered by the $95.00 put means an investor can effectively commit to buying the stock at a lower price while still realizing a premium, thereby adjusting their cost basis favorably. The odds of this put expiring worthless are estimated at 68%, suggesting a decent likelihood that this situation may provide good returns for traders.

On the calls side, the $100.00 call represents a 1% premium, suggesting a potential upside if the stock appreciates to that level. With a 48% chance of expiring worthless, investors selling this covered call could retain both the premium received and their shares, contributing to an annualized return of approximately 25.91%. This is particularly appealing for income-focused investors, as it provides another layer of strategy for capitalizing on the underlying asset.

Overall, the combination of these strategies offers investors opportunities to capitalize on stock price movements in Encompass Health. The different probabilities for both options indicate potential strategies for risk management and return maximization.

Stocks: EHC