Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $14.22) to be 44%. The implied volatility in the put contract example is 49%, while the implied volatility in the call contract example is 50%. Should the covered call contract expire worthless, the premium would represent a 3.59% boost of extra return to the investor, or 26.18% annualized, which we refer to as the YieldBoost.Ĭlick here to find out the Top YieldBoost Calls of Stocks with Insider Buying » On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 58%. Below is a chart showing CHK's trailing twelve month trading history, with the $15.00 strike highlighted in red:Ĭonsidering the fact that the $15.00 strike represents an approximate 5% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Of course, a lot of upside could potentially be left on the table if CHK shares really soar, which is why looking at the trailing twelve month trading history for Chesapeake Energy Corp., as well as studying the business fundamentals becomes important. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 9.07% if the stock gets called away at the May 1st expiration (before broker commissions). If an investor was to purchase shares of CHK stock at the current price level of $14.22/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $15.00. Turning to the calls side of the option chain, the call contract at the $15.00 strike price has a current bid of 51 cents. Below is a chart showing the trailing twelve month trading history for Chesapeake Energy Corp., and highlighting in green where the $14.00 strike is located relative to that history:
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