September 2026 Options Now Available For Honeywell International (HON)

The article discusses potential options strategies for Honeywell International Inc. (HON) involving put and call contracts. Selling the $220 put offers a potential 8.41% return on cash commitment (6.35% annualized) with a 61% chance of expiring worthless, while a covered call strategy at the $230 strike could yield a 13.39% total return if the stock is called away, or a 9.90% premium boost (7.48% annualized) if it expires worthless, with a 45% chance of that outcome; both options have an implied volatility of approximately 25%.

Analysis

The article details two options strategies for Honeywell International Inc. (HON), currently trading at $222.25 per share. The first involves selling a put contract with a $220.00 strike price, yielding a premium of $18.50. This strategy commits the seller to potentially purchase HON shares at an effective cost basis of $201.50, a discount to the current market price, and offers an 8.41% return on cash commitment (6.35% annualized YieldBoost) if the put expires worthless, an event with a 61% probability according to current analytical data. The second strategy is a covered call, involving purchasing HON shares at $222.25 and selling a call contract with a $230.00 strike price for a $22.00 premium. This could result in a 13.39% total return if the stock is called away by the September 2026 expiration, or a 9.90% premium boost (7.48% annualized YieldBoost) if the call expires worthless, which has a 45% chance. Both options strategies operate with an implied volatility of approximately 25%, aligning with Honeywell's actual trailing twelve-month volatility of 25%, suggesting current option pricing is reflective of recent historical price movements.

Key Decisions for Investors

• Investors interested in acquiring Honeywell International Inc. (HON) shares at a potential discount to the current price of $222.25, or generating income, could evaluate selling the $220.00 strike put, which offers a net cost basis of $201.50 if assigned or an 8.41% return on cash (6.35% annualized) if it expires worthless.
• Current HON shareholders seeking to generate additional income while holding the stock might consider the covered call strategy using the $230.00 strike call expiring September 2026; this offers a potential 9.90% premium boost (7.48% annualized) if the option expires worthless, or a 13.39% total return if shares are called away, though it caps upside potential above $230.
• Given that the implied volatility of approximately 25% for both options aligns with HON's 25% trailing twelve-month historical volatility, option premiums appear to be fairly priced relative to recent stock behavior; investors should factor in the stated probabilities of expiration (61% for the put to expire worthless, 45% for the call to expire worthless) when assessing these strategies.