Weatherford International Options Trading Analysis Report

Weatherford International's new options could attract investors. A significant put option at a $55 strike price may provide a buying alternative at a discounted rate compared to the current market price, which remains attractive despite some inherent risks.

Date: 17-01-2025

AI Rating: 6

Options Analysis for Weatherford International
In the latest report, investors are keenly observing Weatherford International's recent options offerings, including both put and call contracts. The significant aspect of the analysis focuses on the put contract available at a $55.00 strike price, indicating a strong commitment from investors willing to purchase shares at a discounted rate. The premium collected from selling the put contract lowers the effective purchase price, bringing it to $54.60. This creates an appealing alternative for those looking to enter the stock when it is currently priced at $72.98 per share.

Given that the strike price represents approximately a 25% discount from the stock's current trading price, the possibility of the put contract expiring worthless is assessed at 91%. Should that occur, the investor would gain a 0.73% return on their cash commitment, or an annualized rate of 4.22%.

Turning to the call contract, investors can engage in a covered call strategy at a $75.00 strike price. By selling this contract after purchasing WFRD at $72.98, they can secure a total return of 8.80% if the stock is called away. However, the potential for upside remains, and investing time in evaluating business fundamentals is recommended. With a current probability of 50% that this contract would expire worthless, the premium collected could result in a 6.03% return or an impressive 34.95% when annualized.

Implied volatility for the put stands at 57%, while the call carries an implied volatility of 47%. In contrast, the actual twelve-month volatility has been recorded at 43%.

Stocks: WFRD