Interesting February 2014 Stock Options for United Technologies

Consistently, one of the more popular stocks people enter into their stock options watchlist at stock trading United Technologies UTX +0.44% Corp. (NYSE: UTX). So this week we highlight one interesting put contract, and one interesting call contract, from the February 2014 expiration for UTX.

The put contract our YieldBoost algorithm identified as particularly interesting, is at the $100 strike, which has a bid at the time of this writing of $1.91. Collecting that bid as the premium represents a 1.9% return against the $100 commitment, or a 6.3% annualized rate of return (at Stock Options Channel we call this the YieldBoost).

Selling a put does not give an investor access to UTX’s upside potential the way owning shares would, because the put seller only ends up owning shares in the scenario where the contract is exercised. So unless United Technologies Corp. sees its shares fall 7.2% and the contract is exercised (resulting in a cost basis of $98.09 per share before broker commissions. Read more: UTX