IInvestors in Sunnova Energy International Inc (ticker: NOVA) saw new options start trading this week, set to expire on December 17th. AT Stock option channel, our YieldBoost formula went through the NOVA options chain for the new contracts of December 17 and identified a sale contract and a purchase contract of particular interest.
The contract to sell at the strike price of $ 30.00 has a current bid of 45 cents. If an investor were to sell to open this sales contract, they agree to buy the stock at $ 30.00, but will also collect the premium, putting the base price of the stock at $ 29.55 (before brokerage commissions). ). For an investor already interested in buying shares of NOVA, this could represent an attractive alternative to paying $ 33.03 / share today.
Since the strike price of $ 30.00 represents a discount of around 9% from the current share price (in other words, it is out of the money by that percentage), it is also possible that the sales contract expires worthless. Current analytical data (including Greeks and Greeks implied) suggests that the current chance of this happening is 82%. Stock Options Channel will monitor these quotes over time to see how they evolve, posting a chart of these numbers on our website under contract detail page for this contract. If the contract expires worthless, the premium would represent a return of 1.50% on the cash commitment, or 60.83% annualized – at Stock Options Channel, we call that the YieldBoost.
Below is a chart showing Sunnova Energy International Inc’s past twelve month trading history, and highlighting in green the location of the $ 30.00 exercise against that history:
As for the options chain call options, the $ 35 strike price contract has a current bid of 80 cents. If an investor were to buy NOVA shares at the current price level of $ 33.03 / share and then sell to open that purchase contract as a “covered call”, they agree to sell the share at $ 35. . Since the call seller will also receive the premium, this would generate a total return (excluding dividends, if any) of 8.39% if the stock is recalled on the December 17th expiration (before broker commissions. ). Of course, a lot of benefits could be left on the table if NOVA shares really soar, which is why it becomes important to look at the last twelve months trading history of Sunnova Energy International Inc, as well as ” study the fundamentals of the business. Below is a chart showing NOVA’s trading history over the past twelve months, with the strike price of $ 35 highlighted in red:
Since the $ 35 strike price represents a premium of around 6% over the current share price (in other words, it’s out of the money by that percentage), it’s also possible that the covered purchase contract expire worthless, in which case the investor would keep both his shares and the premium received. Current analytical data (including Greeks and Greeks implied) suggests that the current chance of this happening is 67%. On our website under contract detail page for this contract, Stock Options Channel will track these quotes over time to see how they change and publish a chart of these numbers (the option contract’s trading history will also be plotted). If the covered purchase contract expires worthless, the premium would represent an increase of 2.42% in the additional return to the investor, or 98.23% annualized, which we call the YieldBoost.
The implied volatility in the sales contract example is 86%, while the implied volatility in the sales contract example is 88%.
Meanwhile, we calculate the actual volatility of the past twelve months (taking into account the closing values of the last 252 trading days as well as today’s price of $ 33.03) to be 73%. For more put and call option contract ideas worth considering, visit StockOptionsChannel.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.