January 2028 Options Now Available For Clorox (CLX)

The article outlines specific options strategies for Clorox (CLX) stock, demonstrating how investors can utilize cash-secured puts and covered calls to generate yield or acquire shares at a discount. Selling a $115 put offers an effective cost basis of $102.40 (from a current $123.39 share price) and a 10.96% return if the option expires worthless, with a 65% probability. Alternatively, a covered call at the $125 strike could yield a 13.87% total return if the stock is called away by January 2028, or a 12.56% premium boost if the option expires worthless, with a 43% probability. These strategies leverage implied volatilities of 26-27% against a trailing 12-month volatility of 21% to manage equity exposure and enhance returns.

Analysis

The current options landscape for Clorox Co. (CLX) presents two distinct yield-generating strategies, both capitalizing on an implied volatility premium. The analysis highlights that implied volatility for the specified January 2028 options is 26-27%, notably higher than the stock's trailing twelve-month actual volatility of 21%. This suggests options premium is relatively rich. For investors seeking a discounted entry, selling the $115 strike put contract offers an effective cost basis of $102.40 per share, a significant discount from the current price of $123.39. This strategy carries a 65% statistical probability of expiring worthless, in which case the seller would realize a 10.96% return on the cash commitment (4.66% annualized). Alternatively, for existing shareholders, a covered call strategy at the $125 strike could generate a total return of 13.87% if the stock is called away. If the option expires worthless, which has a 43% probability, the premium collected represents a 12.56% return enhancement, or a 5.34% annualized yield boost.

Key Decisions for Investors

• For investors bullish on CLX but seeking a lower entry point, selling the January 2028 $115 put offers a method to either acquire shares at an effective cost of $102.40 or earn a 4.66% annualized yield.
• Current CLX shareholders could consider selling the January 2028 $125 covered call to generate income, realizing a 5.34% annualized yield, but must be willing to cap their total return at 13.87% if the stock price appreciates above $125.
• The viability of these strategies hinges on the elevated implied volatility (26-27%) compared to historical volatility (21%); investors should monitor this spread, as a compression could reduce the premium collected and diminish the strategies' attractiveness.