July 11th Options Now Available For Comcast (CMCSA)

An analysis highlights a potential strategy for investors interested in Comcast (CMCSA) involving selling put options at the $28.00 strike price, currently trading with a 4-cent premium. This strategy offers a potential entry point at a net cost basis of $27.96 if the option is exercised, representing a 19% discount to the current share price of $34.47; however, analytical data suggests an 85% probability the contract will expire worthless, yielding a 0.14% return on the cash commitment, or 1.21% annualized, given the implied volatility of the put contract is 37% compared to the actual trailing twelve month volatility of 28%.

Analysis

The article details an options strategy for Comcast Corp (CMCSA), specifically the selling of a put contract at the $28.00 strike price, which carries a current bid of 4 cents. This strategy would result in a net cost basis of $27.96 per share if the option is exercised, representing a notable 19% discount from CMCSA's current trading price of $34.47. Current analytical data suggests an 85% probability that this out-of-the-money put option will expire worthless. Should this occur, the seller would retain the collected premium, achieving a 0.14% return on the cash commitment, or 1.21% annualized, termed 'YieldBoost'. A key observation is the discrepancy between the put contract's implied volatility of 37% and CMCSA's actual trailing twelve-month historical volatility of 28%. This higher implied volatility suggests the option premium may be relatively rich, a condition generally favorable for option sellers. The strategy is positioned as a potentially attractive alternative for investors who are already considering purchasing CMCSA shares.

Key Decisions for Investors

• Investors interested in acquiring Comcast Corp (CMCSA) shares at a potential 19% discount to the current market price could consider selling the $28.00 strike put, which would establish a cost basis of $27.96 if assigned.
• Given the 85% statistical probability of the option expiring worthless, this strategy also presents an opportunity for income generation, yielding 0.14% on the cash committed (1.21% annualized) if CMCSA shares remain above $28.00 through expiration.
• The elevated implied volatility of 37% for the put option, compared to the stock's 28% historical volatility, suggests that option sellers are being compensated with a higher premium for the risk undertaken, making this a potentially opportune moment to sell puts if aligned with an investor's outlook for CMCSA and risk tolerance.