Boston, MA 01/30/2014 (wallstreetpr) – Alpha Natural Resources, Inc. (NYSE:ANR) has seen its September 20 options become available this week. The price at which a buyer will be required to pay for each option will be determined mainly by the time value of the option. Sellers of Puts and Calls have been given one of the best opportunities to achieve higher premiums for contracts as the expiration date is still a whopping 241 days from expiration.
The put contract currently commands a strike price of $6 with a current bid of $1.06. If you are investor in this case and decide to open a Put contract, you will be committing to purchase the stock at a price of $6.00 but you will still be able to collect the premium thus putting the cost basis of the shares at $4.94. To an already existing investor with Alpha Natural Resources, Inc. (NYSE:ANR) then it could present an even interesting and attractive option of paying $6.30 per share. The $6.00 strike represents an approximate 5% discount to the current price that the stock is trading on in the market. This in the current market status presents a possibility that the contracts could expire worthless, analytical date put the possibility of this odds occurring at 64%. If this is to go forth and happen, then the premium would represent a 17.67% return on any cash commitment or an annularity of 26.76%.
Alpha Natural Resources, Inc. (NYSE:ANR) has been experiencing a steep decline in the market attributed to the instability of coal prices. Earnings have been dropping over the past years but consensus estimate this is to change in the coming months as ANR continue to get a good grip of the market. Alpha Natural Resources estimates an improvement in earnings of -$2.28 versus -$11.06, in the prior year the company reported results of -$11.06 versus -$3.25.
