October 17th Options Now Available For Thermo Fisher Scientific (TMO)

Analysis of Thermo Fisher Scientific (TMO) options reveals potential strategies for investors. Selling a $270 put offers a 0.04% return with a 95% chance of expiring worthless, while a covered call strategy at $430 strike yields a potential 10.50% return if the stock is called away, with a 53% chance of the contract expiring worthless and a 5.36% YieldBoost. The implied volatility for the put and call options are 49% and 33% respectively, while the actual trailing twelve month volatility is 27%.

Analysis

Thermo Fisher Scientific (TMO), currently trading at $408.95 per share, presents distinct options-based strategies for investors. Selling the $270.00 strike put contract, with a bid of 10 cents, offers an investor the potential to acquire shares at an effective cost basis of $269.90, representing a substantial 34% discount to the current market price. Current analytics indicate a 95% probability of this out-of-the-money put expiring worthless, in which case the seller retains the premium, yielding a 0.04% return on the cash commitment (0.11% annualized YieldBoost). Conversely, a covered call strategy involving the purchase of TMO shares at $408.95 and selling the $430.00 strike call (bid $21.90) for the October 17th expiration could generate a total return of 10.50% if the stock is called away. This strike is approximately 5% above the current price, and there's a 53% assessed probability of this call expiring worthless, allowing the investor to keep both the shares and the premium, a 5.36% YieldBoost (15.51% annualized). Notably, the implied volatility for the $270 put is 49% and for the $430 call is 33%, both figures exceeding TMO's actual trailing twelve-month volatility of 27%, suggesting option premiums are currently elevated relative to recent historical price movements.

Key Decisions for Investors

• Investors bullish on Thermo Fisher Scientific's long-term prospects and willing to acquire shares at a significant discount might consider selling the $270 strike put, targeting an effective purchase price of $269.90, while understanding the high likelihood (95%) of the option expiring worthless for a modest 0.04% premium return.
• For existing TMO shareholders or those initiating a position at $408.95, selling the $430 strike covered call expiring October 17th could enhance returns through premium collection, offering a 10.50% potential gain if called or a 5.36% YieldBoost if it expires worthless, though this caps upside above $430.
• The elevated implied volatilities (49% for the put, 33% for the call) compared to TMO's 27% trailing historical volatility suggest that current option premiums may offer attractive selling opportunities for investors who anticipate that future volatility will not significantly surpass recent levels.