This COST Iron Condor Targets 44% Return in 5 Days
Outlook is neutral, with stock confined to a channel of ±2%
Strategy has +44% ROI potential and 45% overvalued
| Expiration | 15-Mar-24 |
| Buy | 697.5 Put |
| Sell | 732.5 Put |
| Sell | 765 Call |
| Buy | 800 Call |
| Credit: | $10.75 |
Option Profit Calculator for COST Iron Condor at 15-Mar-24 Expiration
If COST stock price at expiration is between $732.50 and $765.00, this spread has a 44% upside potential
As you can see in the chart above, the optimal outcome is for COST stock price to close between $732.50 and $765.00 at the March 15, 2024 expiration. Within that price range, all of the options will expire worthless, and you'd keep the original $10.75 credit you received at the time of the trade.
The maximum gain will be realized if the stock price is between $732.50 and $765.00. The maximum gain is $10.75
The maximum loss would occur if the stock price at expiration is below $697.50 or above $800.00. The maximum loss is $24.25
COST Spread Current Market Price vs. Historical Average
COST Iron Condor is trading at a 45% premium to historical average.
Using historical data to measure how a similar spread in COST was priced in the market, the 4-year average value was 7.43, with a high mark of 11.90 and a low of 4.04.
Currently, this iron condor is bid at 10.75 and offered at 12.21. The midpoint of the spread is 11.48.
If we use 7.43 as our historical fair value benchmark, the current market bid price is at a 45% premium, while the current market midpoint represents a 55% premium.
| Current Price | Historical Values of Similar Iron Condors | ||||
| Bid | Ask | Midpoint | Average | High | Low |
| 10.75 | 12.21 | 11.48 | 7.43 | 11.90 | 4.04 |
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NOTE: Stock and option trading involves risk that may not be suitable for all investors. Examples contained within this report are simulated And may have limitations. Average returns and occurrences are calculated from snapshots of market mid-point prices And were Not actually executed, so they do not reflect actual trades, fees, or execution costs. This report is for informational purposes only, and is not intended to be a recommendation to buy or sell any security. Neither Market Chameleon nor any other party makes warranties regarding results from its usage. Past performance does not guarantee future results. Please consult a financial advisor before executing any trades. You can read more about option risks and characteristics at theocc.com.
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