Investors in Fomento Economico Mexicano, S.A.B. de C.V. (Symbol: FMX) are now able to explore new options that began trading today, specifically for the December 19th expiration. At Stock Options Channel, our YieldBoost formula has analyzed the FMX options chain and identified two contracts of particular interest: one put and one call.
The put contract at the $90.00 strike price currently has a bid of 15 cents. If an investor chooses to sell-to-open this put contract, they are essentially agreeing to purchase the stock at $90.00 while also collecting the premium. This arrangement effectively lowers the cost basis of the shares to $89.85 (before broker commissions). For those already considering buying FMX shares, this could be an appealing alternative to the current market price of $94.25 per share.
Notably, the $90.00 strike price represents approximately a 5% discount to the current trading price, indicating that it is out-of-the-money by that percentage. Current analytical data, including greeks and implied greeks, suggest a 70% probability that the put contract will expire worthless. Stock Options Channel will monitor these odds over time, providing updates on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would yield a 0.17% return on the cash commitment, or an annualized return of 0.96% — a metric we refer to as the YieldBoost.
Below is a chart illustrating the trailing twelve-month trading history for Fomento Economico Mexicano, S.A.B. de C.V., with the $90.00 strike price highlighted in green:
On the calls side of the options chain, the call contract at the $100.00 strike price has a current bid of 90 cents. If an investor buys FMX stock at the current price of $94.25 per share and sells-to-open this call contract as a “covered call,” they are agreeing to sell the stock at $100.00. Including the premium collected, this could yield a total return of 7.06% if the stock is called away at the December 19th expiration (before broker commissions). However, significant upside potential could remain if FMX shares rise substantially, making it essential to review both the trading history and the business fundamentals.
Below is a chart showing FMX’s trailing twelve-month trading history, with the $100.00 strike highlighted in red:
The $100.00 strike price represents about a 6% premium to the current trading price, indicating it is out-of-the-money by that percentage. There is a possibility that the covered call contract could expire worthless, allowing the investor to retain both their shares and the premium collected. Current analytical data suggest a 63% probability of this occurring. Stock Options Channel will track these odds over time and publish updates on our website under the contract detail page for this contract. If the covered call expires worthless, the premium would represent a 0.95% boost in extra return for the investor, or an annualized return of 5.53%, also referred to as the YieldBoost.
The implied volatility for the put contract is 28%, while the call contract has an implied volatility of 31%. In contrast, we calculate the actual trailing twelve-month volatility, based on the last 250 trading days and today’s price of $94.25, to be 26%. For more options contract ideas worth exploring, 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.
