September 2026 Options Now Available For Home Depot (HD)

Analysis of Home Depot (HD) options reveals potential strategies for investors, including selling put options at the $360 strike with a 60% chance of expiring worthless and a potential 9.74% return on cash commitment, or 7.36% annualized. Covered call opportunities at the $370 strike offer a 12.65% total return if the stock is called away, with a 44% chance of expiring worthless and a potential 10.88% return, or 8.22% annualized; implied volatility for the put and call options are 27% and 26% respectively, while the trailing twelve month volatility is 23%.

Analysis

The article details two options strategies for Home Depot Inc. (HD), which is currently trading at $363.55 per share. For investors considering acquiring HD, selling a put option at the $360.00 strike price, with a current bid of $35.05, offers an effective purchase price of $324.95 if assigned. This strategy also presents a 60% probability of the put expiring worthless, in which case the $35.05 premium would represent a 9.74% return on the cash commitment, or a 7.36% annualized yield. For existing HD shareholders, selling a covered call at the $370.00 strike with a $39.55 premium could yield a total return of 12.65% (excluding dividends) if the stock is called away by the September 2026 expiration. This call has a 44% chance of expiring worthless, allowing the investor to retain both the shares and the premium, which would equate to a 10.88% additional return (8.22% annualized). Notably, the implied volatilities for these options (27% for the put, 26% for the call) are slightly higher than Home Depot's actual trailing twelve-month historical volatility of 23%, suggesting that option premiums are somewhat elevated, potentially benefiting option sellers.

Key Decisions for Investors

• Evaluate selling the $360 strike put on HD to potentially acquire shares at an effective cost of $324.95 or to target a 9.74% return on cash (7.36% annualized) if the option expires worthless.
• Current HD shareholders could consider selling the $370 strike covered call to generate income, potentially achieving a 12.65% total return if called away, or an 8.22% annualized yield boost from the premium if the option expires worthless, while acknowledging the cap on upside potential.
• Recognize that the current implied volatilities for HD options (26-27%) are modestly above the 23% historical volatility, which may present more favorable pricing for option selling strategies.
• Investors should ensure these options strategies align with their individual investment outlook for Home Depot, risk tolerance, and consider the implications of the long-dated September 2026 expiration for the covered call.