Quick Summary
- New Truist Financial Corp (TFC) options with May 2026 expiration are now available, offering potential income strategies for investors.
- A $37.50 strike put option offers a premium of $1.28, potentially reducing cost basis for those looking to buy TFC shares at a discount.
- A $50.00 strike call option provides a premium of $1.00, presenting an opportunity for covered call strategies with a potential 15.44% total return if exercised.
- The article provides analysis on the potential for these options to expire worthless, leading to YieldBoost returns for sellers.
New Options on Truist Financial Corp (TFC) for May 2026 Expiration
Investors in Truist Financial Corp (TFC) have new option contracts available for the May 2026 expiration. These contracts, with a significant time value due to the distant expiration date, may present appealing opportunities for option sellers aiming for higher premiums. Stock Options Channel has identified specific put and call contracts on TFC that warrant attention.
Analyzing the TFC May 2026 Put Option
One particular put contract of interest is at the $37.50 strike price, currently bid at $1.28. For an investor looking to sell this put option, they would commit to buying TFC shares at $37.50, while receiving the $1.28 premium. This effectively lowers the potential cost basis of the shares to $36.22, before accounting for any broker commissions. For those already considering acquiring TFC shares, this could be a more attractive entry point compared to the current trading price.
The $37.50 strike price is approximately 15% below TFC’s current trading price, meaning it is currently out-of-the-money. Analytical data suggests a 74% probability that this put contract could expire worthless.
💡 If the contract expires worthless, the collected premium would represent a return of 3.41% on the cash laid out, equating to an annualized yield of 6.08%, a strategy referred to as YieldBoost.
Exploring the TFC May 2026 Call Option
On the call side, a notable contract is the $50.00 strike price call, with a current bid of $1.00. An investor who already owns TFC shares (currently trading around $44.18) and sells this call option as a covered call commits to selling their shares at $50.00. If the stock reaches or exceeds this price by the May 2026 expiration, the total return, excluding dividends, could reach approximately 15.44% before broker commissions.
It’s important to consider that significant upside potential could be missed if TFC’s stock price experiences substantial growth beyond the $50.00 strike. Therefore, examining historical trading patterns and the company’s fundamental performance is crucial for informed decision-making.
The $50.00 strike price is about 13% above the current stock price, indicating it is also out-of-the-money. Current data suggests a 66% probability that this covered call contract could expire worthless.
📊 If the covered call expires worthless, the investor not only keeps their shares but also pockets the $1.00 premium, providing an additional 2.26% return on their investment, or 4.03% annualized. This is also categorized as a YieldBoost.
Volatility and Conclusion
The implied volatility for the analyzed put contract is 42%, while the call contract shows an implied volatility of 33%. In comparison, the actual trailing twelve-month volatility for TFC, based on the last 250 trading days and the current price of $44.18, is calculated at 31%.
For more insights into potential option strategies and available contracts, exploring resources like StockOptionsChannel.com is recommended.
Expert Summary
The introduction of new May 2026 options for Truist Financial Corp (TFC) presents strategic opportunities for investors. Both put selling at a $37.50 strike and covered call writing at a $50.00 strike offer defined potential returns and premium income. The probabilities of these options expiring worthless, leading to YieldBoost returns, are also detailed, providing a balanced view for potential participants.