Charter Communications Options Offer Potential Returns

In a recent report, options for Charter Communications (CHTR) set for November 29th showcase intriguing opportunities for investors. With put contracts offering discounts and call contracts presenting substantial premiums, market strategies appear favorable at current prices.

Date: 10-10-2024

AI Rating: 7

The report provides insights into the options available for Charter Communications Inc (CHTR) for the November 29th expiration. It mentions a put contract at the $325.00 strike price, which presents a current bid of $12.60. An investor selling this put contract would incur a cost basis of $312.40 per share, representing an attractive alternative to the market price of $335.22. This opportunity showcases a potential 3.88% yield return on the cash commitment, or an impressive annualized return of 28.28% if the contract expires worthless.

On the call option side, the report discusses a $340.00 strike price call contract that has a current bid of $17.00. If an investor buys CHTR shares at $335.22 and sells this covered call, there’s a potential total return of 6.50% if the stock is called away at expiration. The $340.00 strike represents just a 1% premium to the current trading price, implying a fair chance of the contract expiring worthless (49%), allowing the investor to retain the shares and the premium collected, resulting in a 5.07% boost to the overall return or 36.99% annualized if successful.

Despite the potential for notable returns, the report indicates that the put and call contracts possess considerable implied volatility, reflecting investor sentiment and expectations in the market. The calculated implied volatility for the put contract is 40%, and for the call, it stands at 43%, compared to a trailing twelve-month actual volatility of 39%.

Stocks: CHTR