Nucor Corp. Options Trading Insights: December Contracts Analyzed

The report reveals new options for Nucor Corp. (NUE) with enticing potential returns. The insights on put and call options hint at market expectations and investment strategies that could influence stock price dynamics.

Date: 17-10-2024

AI Rating: 6

The report discusses Nucor Corp. (NUE) and new options trading for December 20th contracts. The options include a put contract at a $155.00 strike price and a call contract at a $160.00 strike price, revealing investor sentiment towards the stock's price movement.

The put contract allows investors to purchase shares at a discounted price, with a current bid of $6.20, leading to a cost basis of $148.80 if executed. Since this strike price is approximately 2% below the current stock price of $157.76, investors recognize the possibility of the contract expiring worthless, with a noted 59% chance. If it does, the premium translates to a 4.00% return, or 22.80% annualized, enhancing the appeal for prospective investors.

On the other side, the call contract at a $160.00 strike price offers a potential return of 6.17% on the current share price if exercised. This contract also has a 50% chance of expiring worthless, allowing investors to retain both their stock and the premium collected, potentially yielding a 4.75% additional return, or 27.10% annualized.

Overall, implied volatilities for the put and call options stand at 32% and 34%, respectively, while the actual trailing volatility is 27%. These figures highlight a relatively stable market outlook for Nucor in the near term.

Stocks: NUE