Below is a chart showing DPZ's trailing twelve month trading history, with the $330.00 strike highlighted in red:Ĭonsidering the fact that the $330.00 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Of course, a lot of upside could potentially be left on the table if DPZ shares really soar, which is why looking at the trailing twelve month trading history for Dominos Pizza Inc., as well as studying the business fundamentals becomes important. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 10.76% if the stock gets called away at the December 15th expiration (before broker commissions). If an investor was to purchase shares of DPZ stock at the current price level of $325.02/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $330.00. Turning to the calls side of the option chain, the call contract at the $330.00 strike price has a current bid of $30.00. Should the contract expire worthless, the premium would represent a 7.19% return on the cash commitment, or 10.97% annualized - at Stock Options Channel we call this the YieldBoost.īelow is a chart showing the trailing twelve month trading history for Dominos Pizza Inc., and highlighting in green where the $320.00 strike is located relative to that history: Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. To an investor already interested in purchasing shares of DPZ, that could represent an attractive alternative to paying $325.02/share today.īecause the $320.00 strike represents an approximate 2% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $320.00, but will also collect the premium, putting the cost basis of the shares at $297.00 (before broker commissions). The put contract at the $320.00 strike price has a current bid of $23.00. At Stock Options Channel, our YieldBoost formula has looked up and down the DPZ options chain for the new December 15th contracts and identified one put and one call contract of particular interest. One of the key data points that goes into the price an option buyer is willing to pay, is the time value, so with 239 days until expiration the newly trading contracts represent a possible opportunity for sellers of puts or calls to achieve a higher premium than would be available for the contracts with a closer expiration. (NYSE: DPZ) saw new options begin trading today, for the December 15th expiration. December 15th Options Now Available For Dominos Pizza (DPZ) By The Online Investor Staff, Thursday, April 20, 11:28 AM ET
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