Clorox Co Options Trading Insights for November Expiration

Recent reports indicate that Clorox Co (CLX) options for the November 15th expiration have garnered investor interest, particularly in two notable contracts. This movement in options may influence stock prices, presenting opportunities and risks for potential investors.

Date: 19-09-2024

AI Rating: 7

The report discusses newly available options for Clorox Co (CLX), focusing on both put and call contracts set to expire on November 15th. These insights could significantly influence investor strategies and consequently stock price movements.

For the put contract at the $160.00 strike price, investors can sell-to-open at a current bid of $3.00. This allows them to commit to purchase CLX stock at $160.00 while effectively lowering their cost basis to $157.00 if they choose to exercise this option. Given that this strike price is approximately 1% lower than the current trading price ($161.80), there is a reasonable chance the put contract could expire worthless, meaning the investors retain the premium collected. The odds of this happenstance are suggested to be about 59%. The potential annualized return from this trade, should the contract expire worthless, stands at an attractive 12.00%.

On the other side of the spectrum, the $165.00 call contract has a bid of $2.80 and represents a 2% premium to the current trading price. A purchase of CLX stock at $161.80 followed by selling this call as a covered call could yield a total return of 3.71%, assuming the stock is called away at expiration. The call contract too has a 54% chance of expiring worthless, which means the investor could keep both the shares and the premium, equating to an annualized return of 11.07%.

Both options present unique advantages and risks, with the underlying stock price affecting potential earnings. Additionally, implied volatilities of both put (24%) and call (23%) contracts indicate market expectations regarding future price fluctuations, comparative to the trailing twelve month volatility reported at 23%.

Overall, the information provided could impact CLX stock in terms of pricing strategy and investor sentiment. The attractiveness of both puts and calls may indicate a diverging outlook among investors regarding potential movements in CLX's stock price.

Stocks: CLX