ORCC January 2023 Options start trading


IInvestors at Owl Rock Capital Corporation (Ticker: ORCC) saw new options begin trading today, for January 2023 expiry. One of the key data points that goes into the price that a option buyer is willing to pay is the time value, so with 275 days to expiration, new trade contracts represent a possible opportunity for put or call sellers to earn a higher premium than would be available for contracts with closer expiration. At Stock Options Channel, our YieldBoost formula scoured the ORCC options channel for new January 2023 contracts and identified the next put contract of particular interest.

The put contract at the strike price of $15.00 has a current bid of 60 cents. If an investor were to sell to open this put contract, they agree to buy the stock at $15.00, but will also collect the premium, placing the cost base of the stock at $14.40 (before brokerage commissions ). For an investor already interested in buying shares of ORCC, this could represent an attractive alternative to paying $15.17/share today.

Since the $15.00 strike represents about a 1% discount to the current stock price (in other words, it’s out of the money by that percentage), it’s also possible that the sales contract expires worthless. Current analytical data (including Greeks and implied Greeks) suggests that the current chance of this happening is 99%. Stock Options Channel will track these odds over time to see how they change, by posting a table of these numbers on our website under the contract detail page for that contract. If the contract expires worthless, the premium would represent a return of 4.00% on the cash commitment, or 5.31% annualized – at Stock Options Channel, we call this the Yield increase.

Below is a chart showing the last twelve months trading history for Owl Rock Capital Corporation, and highlighting in green where the $15.00 strike falls in relation to that history:

Meanwhile, we calculate that the actual volatility of the last twelve months (taking into account the closing values ​​of the last 253 trading days as well as the current price of $15.17) is 15%. For more put and call options contract ideas worth considering, visit StockOptionsChannel.com.

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


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