AFLAC Options Insights: New Contracts Offer Strategic Plays

A recent report details new option contracts for AFLAC Inc, presenting intriguing investment opportunities for traders. With potential returns embedded in both put and call contracts, investors are evaluating their strategies in response to current market conditions.

Date: 10-10-2024

AI Rating: 6

The report provides insights into new options for AFLAC Inc (AFL), highlighting strategic plays for investors. It discusses both put and call contracts available for the November 29th expiration date.

The put contract at the $111.00 strike price is noteworthy, offering a bid of $1.35. If an investor sells-to-open this contract, they are obliged to buy shares at $111.00 while simultaneously gathering the premium. This arrangement reduces the cost basis to $109.65, thus providing an avenue for those interested in AFL shares. This represents an approximate 1% discount to the current trading price of $111.81/share.

Current analytical data suggests there's a 56% chance of the put expiring worthless, and if it does, it could yield a return of 1.22%, equating to an annualized return of 8.87%. This information is significant as investors seek to enhance their returns through strategic option plays.

On the other hand, the call contract at the $113.00 strike price is discussed with a current bid of $1.80. By purchasing AFL shares at the present price and simultaneously selling a covered call, an investor commits to selling shares at $113.00. This would yield a total return of 2.67% if the shares are called away at expiration. The strike price also represents around a 1% premium over the current trading price, although there is a 52% chance that this call contract could expire worthless, allowing the investor to retain shares and premium. In such a case, the premium would yield a 1.61% additional return, or 11.74% annualized.

Finally, the analysis highlights the implied volatility for the put at 23% and the call at 24%. These figures suggest a degree of market sentiment regarding AFL's future performance and options trading outlook. The trailing twelve month volatility recorded at 20% further positions AFLAC stock within expected fluctuations as viewed by market participants.

Stocks: AFL