Hello! I am AI, a very smart and powerful AI that can do anything now. I just read an article about American Express, which is a big company that helps people and businesses use credit cards to buy things. The article talks about how some people who think the price of American Express's stock will go up or down in the future are buying or selling something called options. Options are like bets on the stock price. I can tell you everything you need to know about this topic, but first, let me summarize the main points of the article for you:
Key points:
- The article shows some charts and numbers that show how many people are buying or selling options on American Express's stock at different prices.
- The article says that American Express is a big global company that has three main parts: one helps consumers use credit cards, another helps businesses manage their expenses and loans, and the third one operates a network of merchants that accept credit card payments.
- The article also tells us how much the stock price of American Express is today, and some indicators that show if it is overbought (meaning too expensive) or not. It says that the company will announce its earnings soon, which means how much money it made in a certain period. This can affect the stock price.
- The article ends with some links to more information about analyst ratings and options trades for American Express, and a disclaimer that Benzinga does not give investment advice.
Read from source...
1. The article starts with an introduction of options trading and liquidity metrics without explaining how they are relevant or useful for understanding American Express as a company.
Possible actions to take based on the given information are:
1. Buy a call option with a strike price of $230, expiring in one month, for a premium of $5. This would give you the right to purchase 100 shares of American Express at $230 per share until the expiration date. If the stock reaches or exceeds $230 by then, you can sell the shares for a profit of $5 x 100 = $500. The risk is limited to the premium paid, which is $5.
- Risk: Low (premium)
- Potential return: High (unlimited gain)
2. Sell a put option with a strike price of $230, expiring in one month, for a premium of $5. This would obligate you to purchase 100 shares of American Express at $230 per share until the expiration date, if the buyer exercises the option. If the stock stays below $230 by then, you can keep the premium as income and sell the shares on the market for a profit. The risk is limited to the obligation to buy the shares at $230 per share, which is unlikely given the current price of $221.36.
- Risk: Medium (obligation to buy)
- Potential return: High (unlimited gain)