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Options Trading at SeaWorld Entertainment (SEAS) Week 1 of June 2023

Investors at SeaWorld Entertainment Inc. (Symbol: SEAS) have seen new options become available this week for a June 2023 expiration date. One of the key data points that goes into the price an option buyer is willing to pay is time value. As such, with 238 days to maturity, newly available contracts represent an opportunity for put or call sellers to potentially achieve higher premiums. Available for contracts that are about to expire.and Stock option channelour YieldBoost formula examined the SEAS options chain for new contracts for June 2023 and identified one put and one call contract of particular interest.

The current bid for the put contract with a strike price of $40.00 is $3.70. If an investor sells and opens that put contract, they promise to buy the stock for his $40.00, but also recover the premium, reducing the cost basis of the stock to $36.30 (before broker fees). to For investors already interested in buying SEAS shares, this could be a more attractive alternative than currently paying $51.67 per share.

Since the $40.00 strike represents a discount of approximately 23% to the current stock trading price (ie, out of the money by that percentage), it is also possible that the put contract will expire worthless. Current analytical data (including Greek and implied Greek) suggest that the chance of it happening is currently 81%. The Stock Options Channel tracks these odds to see how they change and publishes charts of these numbers on their website. Contract details page for this contractIf the contract expires at no value, the premium represents a 9.25% return on the cash commitment, or an annualized rate of 14.19% — Stock options channels represent this at yield boost.

Below is a chart showing SeaWorld Entertainment Inc.’s trading history over the past 12 months, highlighting in green where the $40.00 strike is for that history.


Looking at the calling side of the options chain, the current bid for the call contract with a $55.00 strike is $8.30. If an investor buys his SEAS shares at his current price level of $51.67/share and opens the call contract as a certuate as a “covered call”, the shares he sells at $55.00. I promise Considering that the call seller also recovers the premium, if the stock were called at his June 2023 maturity (before brokerage fees), it would have resulted in a total return of 22.51% (excluding dividends, if any). increase. Of course, if SEAS’s stock price surges, it could leave a lot of upside. That’s why it’s important to study the business fundamentals by looking at SeaWorld Entertainment Inc.’s trading history over the past 12 months. Below is a chart showing SEAS’ trading history over the past 12 months, with the $55.00 strike highlighted in red.

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Considering the fact that a strike of $55.00 represents a premium of about 6% to the current stock trading price (i.e. it is out of the money by that percentage), if a covered call contract is then an investment The house will remain with its stock and premium collected. Current analytical data (including Greek and implied Greek) suggest that the chance of it happening is currently 44%. On our website, Contract details page for this contract, the Stock Options Channel tracks these odds over time to see how they change and publishes a chart of those numbers (the trading history of the option contract is also charted). . If the covered call contract expires at no value, the premium represents his 16.06% increase in additional return to investors, or his 24.64% annualized. yield boost.

The put contract example has an implied volatility of 68%, while the call contract example has an implied volatility of 59%.

On the other hand, the actual volatility over the last 12 months (taking into account the closing prices of the last 252 trading days and today’s price of $51.67) is calculated as 52%. Visit StockOptionsChannel.com for more interesting put and call option contract ideas.

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The views and opinions expressed herein are those of the authors and do not necessarily reflect those of Nasdaq, Inc.

https://www.nasdaq.com/articles/first-week-of-june-2023-options-trading-for-seaworld-entertainment-seas Options Trading at SeaWorld Entertainment (SEAS) Week 1 of June 2023

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