New Options for Schlumberger Offer Investment Opportunities

A recent report reveals that fresh options contracts for Schlumberger Ltd have been introduced, providing potential avenues for investors. The analysis highlights the strike prices and premiums, emphasizing the benefits and risks involved with these new options.

Date: 19-09-2024

AI Rating: 7

The report discusses the new options contracts available for Schlumberger Ltd (SLB), particularly focusing on a put contract with a strike price of $35.00 and a call contract with a strike price of $45.00. The put contract carries a current bid of $1.00, allowing investors to purchase shares at an effective cost of $34.00. This represents a potential 17% discount compared to the current share price of $42.37.

The attractive premium from the put contract suggests that if it expires worthless, it would yield a 2.86% return on investment, annualizing to 4.36%. Additionally, there is an 82% probability of this contract expiring worthless, making it a favorable option for investors looking to lower their purchase price.

On the call side, the contract with a strike price of $45.00 has a current bid of $2.18. For an investor purchasing SLB shares at the current price, selling this covered call would result in an 11.35% total return if the stock is called away. The chance of this call contract expiring worthless is 54%, which would allow investors to retain their shares and the premium.

Implied volatility differs between the put (32%) and call contracts (27%), while the actual trailing twelve-month volatility is reported as 27%. This data suggests that potential profits could vary based on market conditions.

Stocks: SLB