Chubb Ltd Options Analysis: Potential Gains Ahead for Investors

Chubb Ltd (CB) sees new options introduced with opportunities for investors. With a favorable put option at a $280 strike and covered call at $310, there’s potential for returns despite uncertainties. Investors should assess the risk and reward balance before proceeding.

Date: 11-03-2025

AI Rating: 7

Options Overview
Chubb Ltd has introduced new options contracts with expiration in June 2026, which can appeal to investors looking for opportunities. The put contract at a $280 strike price has a current bid of $19.90, allowing investors who sell this option to achieve a cost basis of $260.10 for the stock. This places the strike price about 3% below the current trading price of $289.89, indicating potential attractiveness for investors seeking a bargain. However, there’s also a 66% chance this contract may expire worthless, which could affect decision-making among risk-averse investors.

Call Options Analysis
Moreover, the call contract at a $310 strike price presents a different scenario. The current bid of $23.00 implies that if investors covered the call after purchasing shares at the current price, they could see a total return of 14.87% if shares are called away upon expiration. However, the potential loss of upside if the stock price rises significantly must be considered. There is a 49% chance the call contract might expire worthless, allowing investors to retain their shares while collecting premium income, which equates to a potential yield boost of 6.24% annualized.

Volatility Figures
Implied volatility figures are relatively high, at 25% for the put and 23% for the call, compared to actual trailing twelve-month volatility of 19%. Such discrepancies can indicate expectations of increased price shifts, which might attract speculative trading, but could also heighten risk levels.

In summary, both the put and call options present worthwhile opportunities with acceptable risk parameters for investors targeting Chubb Ltd. While the premium and potential returns appear attractive, investors should remain cautious of market conditions influencing these probabilities.

Stocks: CB