This NEE Credit Put Spread Could Pay 33% Return in 17 Days
Bullish play with a target stock price of $57 or above
Strategy has +33% upside potential and 15% overvalued
Option Profit Calculator for NEE Put Spread at 15-Dec-23 Expiration
If NEE stock price at expiration is at or above $57.00, this spread has a 33% upside potential
The optimal stock price for this option strategy is to close at or above $57.00 on the expiration date, December 15, 2023. In that scenario, both puts would expire worthless, allowing you to keep the entire $0.75 you received when selling the spread. That corresponds to a potential +33% return on the amount at risk with 17 days left until expiration.
The maximum gain will be realized if the stock price is at or above 57.00. The maximum gain is $0.75
The breakeven point is at 56.25, which is 2.8% below the current spot price.
The maximum loss will occur when the stock price is at or below 54. The max loss is $2.25.
NEE Spread Current Market Price vs. Historical Average
NEE Put Spread is trading at a 15% premium to historical average.
Using historical data to measure how a similar spread in NEE was priced in the market, the 4-year average value was 0.65, with a high mark of 0.81 and a low of 0.43.
Currently, this vertical put spread is bid at 0.75 and offered at 0.90. The midpoint of the spread is 0.83.
If we use 0.65 as our historical fair value benchmark, the current market bid price is at a 15% premium, while the current market midpoint represents a 26% premium.
|Current Price||Historical Values of Similar Spreads|
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