KRC Investors Eye New Call Options with 8.15% Return Prospect

In a recent report, Kilroy Realty Corp (KRC) sees new options trading for December 20th, highlighting a covered call opportunity. With an 8.15% total return if the stock is called away, investor interest is piqued, alongside a favorable view on options risk.

Date: 17-10-2024

AI Rating: 7

The report highlights a trading opportunity for Kilroy Realty Corp (KRC) with new options beginning for a December 20th expiration. The key focus is a call contract with a $45.00 strike price, trading at a current bid of 10 cents. Investors looking to employ a covered call strategy will find potential benefits.

The covered call strategy allows investors to sell their shares at a $45.00 strike price while collecting the option premium, which leads to a total expected return of 8.15% if the shares are called away. This is noteworthy because it shows the potential for a favorable return based on current trading levels of $41.70 per share.

Moreover, there is a mentioned chance that the contract could expire worthless due to the $45.00 strike price being approximately 8% above the current stock price. This would allow investors to retain their shares and the collected premium, representing a 0.24% boost in return, or annualized 1.37%. The report indicates a 59% chance of this outcome occurring.

The report also underscores the importance of understanding the underlying business fundamentals and the stock's trading history which may influence future trading behavior and decisions. Implied volatility stands at 53%, contrasting with the actual trailing volatility calculated at 39%. The discrepancy between actual and implied volatility could also influence investor sentiment and trading strategies.

Stocks: KRC