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 bid of 4 cents. This strategy offers a potential cost basis of $27.96 per share if the contract is exercised, a discount to the current market price of $34.47, while carrying an estimated 85% probability of expiring worthless, yielding a 0.14% return on the cash commitment, or 1.21% annualized. The implied volatility of the put contract is 37%, compared to a trailing twelve-month volatility of 28% for CMCSA.

Analysis

The article outlines a specific options strategy for Comcast Corp (CMCSA) investors, focusing on selling a put contract at the $28.00 strike price. This contract has a current bid of 4 cents, which, if the option is sold and subsequently exercised, would establish a cost basis for CMCSA shares at $27.96, representing an approximate 19% discount compared to the current trading price of $34.47. Analytical data suggests an 85% probability that this out-of-the-money put option will expire worthless. Should this occur, the collected premium would translate to a 0.14% return on the cash commitment, or a 1.21% annualized return, referred to as the "YieldBoost." A key observation is the discrepancy between the implied volatility of this put contract, which stands at 37%, and CMCSA's actual trailing twelve-month historical volatility of 28% (calculated over the last 250 trading days and including the current price). This higher implied volatility contributes to the option's premium but also suggests that the market is pricing in a greater potential for price fluctuation than has been historically observed for the stock.

Key Decisions for Investors

• Investors already interested in acquiring Comcast (CMCSA) shares at a lower price point could consider selling the $28.00 strike put option, as this strategy offers a potential entry at $27.96 per share, a notable discount to the current market value.
• The strategy presents a potential income generation opportunity through the collected premium, realizing a 0.14% return (1.21% annualized) if the option expires worthless, an outcome with a stated 85% probability.
• Careful consideration should be given to the elevated implied volatility of 37% for the put option compared to CMCSA's 28% historical volatility, as this suggests the option market is pricing in higher expected price swings or perceived risk, which, while boosting the premium, also reflects uncertainty.