CME Group Options Trading Starts with Attractive Contracts

CME Group offers new April options involving attractive contracts. The put option at $210 carries an 81% chance of expiring worthless while the covered call at $240 presents a 66% probability, indicating potential stability in trading.

Date: 15-01-2025

AI Rating: 7

Options Trading Overview
Investors are venturing into new options trading for CME Group, specifically with contracts set to expire on April 17th. Investors who are focused on options trading could find the achievements represented by the put and call contracts offer opportunities that reflect market sentiment.

Put Option Analysis
The put contract at a strike price of $210 indicates a current bid of 50 cents. Selling this put contract entails commitment to purchase the stock at this price, essentially allowing investors to acquire shares at a reduced cost basis of $209.50. Given the approximate 8% discount relative to the current trading price of $228.77/share, this could present an enticing strategy for investors interested in purchasing shares. With a high probability of 81% that the contract may expire worthless, this ensures limited downside risk for the seller.

Call Option Analysis
The call contract at the $240 strike price has a bid of $3.50. Should an investor buy CME shares at the current price and sell this covered call, the potential return is 6.44% upon exercising the call if the stock appreciates to this level. However, there’s also a 66% probability that the call contract could expire worthless, allowing the seller to retain both the stock and the premium generated, providing a decent yield return of 1.53%, or annualized at 6.07%. This likelihood indicates a favorable trading environment for potential profits even if the stock does not reach the targeted price.

Volatility Insights
The implied volatility for the put options is recorded at 21%, contrasting with the call options at 20%, while the actual trailing twelve-month volatility stands at 17%. With the observed volatilities, potential investors might want to consider holding off or assessing their positions according to the current market conditions.

Stocks: CME