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Options Strategies Spark Interest for Diamondback Energy (FANG)

Options trading for Diamondback Energy (FANG) reveals intriguing strategies. Investors can explore new contracts with potential returns as the stock's price moves and volatility trends shape opportunities.

Date: 
AI Rating:   7

Options Trading Insights: The report discusses new options trading for Diamondback Energy, Inc. (FANG). Investors can look at put and call contracts that may yield appealing returns based on the stock's price movements.

For the put contract at the $155.00 strike, selling-to-open allows an investor to potentially purchase FANG shares at a lower effective price, enhancing opportunities for profit. The $5.70 premium offers a 3% discount relative to the current trading price, presenting a significant advantage for those willing to take on the associated risks. Should this contract expire worthless, the expected return could yield a robust annualized rate of 24.42%.

The call contract at the $160.00 strike price presents another strategy; investors can lock in a 5.21% return if the stock rises to the strike price by April 17th, although there is a risk of missing out on further gains if FANG's price appreciates significantly beyond that point. The chance of the covered call expiring worthless stands at 49%, suggesting a balanced risk-to-reward profile in the current market.

Additionally, the implied volatility figures suggest a high level of activity in the options market, which can lead to increased speculation and trading volumes. The comparison with trailing volatility indicates that current options premiums are gauging higher expectations for future price movements.

Stocks:  FANG