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New Options Trading for Charter Communications Hints at Returns

Investors eyeing Charter Communications are finding new options for potential returns. The $335 put offers a 3.91% yield while the $345 call could lead to a 6.57% total return. These insights could affect investor sentiment moving forward.

Date: 
AI Rating:   7
Options Trading Insights
Charter Communications Inc (Symbol: CHTR) has seen the initiation of new options trading with specific strike prices that could influence investor behavior and stock prices. The put option at $335.00 has a bid of $13.10, leading to an effective cost basis of $321.90 if exercised. This represents about a 1% discount to the current share price of $338.38, which could attract investors looking to buy the stock at a better price. If the put expires worthless, this could result in a return of 3.91% based on the premium, equivalent to 33.23% annualized. Such attractive numbers may encourage further investment in CHTR shares and bolster its stock price.

Covered Call Earnings Potential
The $345.00 call option has a bid of $15.60 and, if the stock is called away, could yield a 6.57% total return for investors, excluding dividends. Since this strike price also represents a 2% premium over the current trading price, there is a chance the call may expire worthless, allowing investors to keep their shares and the collected premium. The resultant earnings could provide a 4.61% additional return, or 39.17% annualized, further creating incentive for investors to participate in CHTR’s options.

Implied Volatility
Implied volatility for the put and call contracts stands at 42% and 45% respectively, indicating market expectations of stock price movements. The actual trailing volatility is measured at 41%, suggesting alignment with market expectations. Investors will closely monitor these contracts and related metrics as their determination and sentiment towards CHTR could ultimately influence stock price trends.

Stocks:  CHTR