Initial Week of TSCO Options Trading for December 19th
Put Contract Overview: The $50.00 put contract for TSCO has a bid of 10 cents, allowing investors to buy shares at a cost basis of $49.90, which is a 5% discount from the current price of $52.59. There is a 68% chance the contract may expire worthless, offering a potential 0.20% return on cash commitment.
Call Contract Overview: The $60.00 call contract has a bid of 20 cents, enabling investors to sell shares at that price, which represents a 14% premium over the current stock price. If the contract expires worthless, investors keep their shares and the premium, resulting in a potential 0.38% additional return.
Volatility Insights: The implied volatility for the put contract is 39%, while for the call contract it is 30%. The actual trailing twelve-month volatility is calculated at 28%, providing context for the options' pricing.
YieldBoost Concept: The article discusses the concept of YieldBoost, which refers to the additional returns investors can earn from options contracts, highlighting the potential annualized returns from both the put and call contracts.
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- Dow Hits All-Time High: The Dow Jones Industrial Average rose by 0.64%, reaching a new all-time high, reflecting investor confidence in economic recovery, despite mixed overall market performance indicating divergent views among investors on various sectors.
- Chip Stocks Decline: With Marvell Technology and Intel falling over 9% and 8% respectively, the weakness in chipmakers weighed on the broader market, suggesting that the pressure on tech stocks may impact future investment sentiment.
- Weak Housing Data: U.S. May housing starts fell 15.4% month-over-month to a six-year low of 1.177 million, below expectations of 1.430 million, indicating that the weakness in the housing market could pose challenges to economic growth.
- Oil Prices Plummet: WTI crude oil prices dropped more than 5% to a 3.5-month low due to the U.S.-Iran agreement to reopen the Strait of Hormuz, enhancing expectations for a revival in oil supplies, which may affect the performance of energy stocks.
- Market Divergence: The S&P 500 Index fell by 0.18% and the Nasdaq 100 Index dropped by 0.83%, while the Dow Jones Industrial Average rose by 0.69% to a new all-time high, indicating a divergence in market performance, particularly as energy stocks are pressured by plunging crude oil prices.
- Weak Housing Data: US May housing starts fell by 15.4% month-over-month to a six-year low of 1.177 million, significantly below the expected 1.430 million, while building permits also declined slightly, reflecting weakness in the real estate market that could negatively impact overall economic growth.
- Oil Price Impact on Sentiment: WTI crude oil prices dropped over 3% to a 3.25-month low due to the US-Iran agreement to reopen the Strait of Hormuz, which has eased inflation expectations; while this provides short-term support for stocks, the long-term effects remain to be seen.
- Fed Meeting Focus: The market is turning its attention to the two-day FOMC meeting, where rates are expected to remain unchanged, but the press conference led by new Chair Kevin Warsh will be crucial, as investors will look for insights on future inflation outlook and policy direction.
- Mixed Market Performance: The S&P 500 Index rose by 0.11%, the Dow Jones Industrial Average increased by 0.57%, while the Nasdaq 100 Index fell by 0.18%, indicating a complex market sentiment particularly influenced by the pressure on energy stocks due to declining oil prices.
- Oil Price Impact: WTI crude oil prices dropped over 3% to a 3.25-month low, easing inflation expectations and providing support for stocks and bonds, reflecting a cautious market outlook on future economic growth.
- Weak Housing Data: US May housing starts fell by 15.4% month-over-month to a six-year low of 1.177 million, below the expected 1.430 million, indicating potential challenges for economic recovery stemming from a sluggish real estate market.
- FOMC Meeting Focus: Market attention shifts to the two-day FOMC meeting, where rates are expected to remain unchanged, but the press conference led by new Chair Kevin Warsh will be pivotal in shaping future monetary policy directions.
- SpaceX Stock Surge: Following a nearly 20% gain on its first trading day, SpaceX's stock rose another 4.5% in premarket trading, driven by CEO Elon Musk's projection of $1 trillion in revenue by 2030, potentially pushing its market cap above Amazon's.
- Tesla Deliveries Exceed Expectations: Goldman Sachs reports that Tesla's second-quarter vehicle deliveries are tracking ahead of consensus, with speculation that Musk aims to merge Tesla and SpaceX to leverage synergies between the Optimus robot and Starlink internet service, enhancing competitive positioning.
- Dave & Buster's Sales Decline: Dave & Buster's comparable store sales fell 5.4% in the quarter ending May 5, significantly worse than the -1.2% consensus, resulting in a nearly 15% drop in premarket trading, prompting analysts to adopt a cautious outlook on its future performance.
- Yum Brands Sells Pizza Hut: Yum Brands has sold Pizza Hut to private equity firm LongRange Capital for $2.7 billion, a strategic move to exit the underperforming pizza business and focus on higher-growth brands like KFC and Taco Bell, reflecting a decisive shift in corporate strategy.
- Chewy's Investment Potential: Chewy's stock is currently 58% below its 52-week high, yet its sales have nearly quadrupled over the past seven years, with 84% of sales coming from its stable Autoship service, providing ample cash flow for expansion into new areas like vet clinics and private-label goods.
- Sprouts Market Performance: Sprouts Farmers Market's stock is 50% below its 52-week high; however, despite challenges in the consumer environment, its latest quarter saw a 4% sales increase, and the company plans to grow its store count by over 10% annually, indicating strong growth potential in the health food sector.
- Tractor Supply's Resilience: Tractor Supply's stock is down 51% from its 52-week high, but its leadership in the rural market and a loyal customer base of 38 million members ensure stable sales, with a 3.1% dividend yield at an all-time high, highlighting its investment appeal at a low valuation.
- Long-Term Growth Strategies: All three companies exhibit strong growth potential at their current undervalued states, with Chewy and Sprouts focusing on expansion plans and Tractor Supply emphasizing dividend growth strategies, suggesting they could be solid investment choices over the next decade.
- Father's Day Event: Tractor Supply will host a Father's Day craft activity on June 13 across all locations from 10 AM to 2 PM, allowing families to decorate custom tackle boxes for dads for free, enhancing customer engagement and brand loyalty.
- Practical Product Recommendations: The company's Father's Day gift guide features budget-friendly options under $50, including the JobSmart 650-Lumen Rechargeable Flashlight and Carhartt Men's Iconic T-Shirt, aimed at meeting diverse consumer needs and driving sales.
- Significant Discounts: Customers can enjoy up to $100 off on outdoor and grilling items, such as the Blackstone Patriotic Griddle Bundle and Even Embers Tactical Propane Torch, enticing shoppers to purchase high-value products and boosting revenue.
- Brand Expansion and New Launches: Tractor Supply officially launches SKIL power tools, further enriching its product line to meet consumer demand for high-quality tools, which is expected to enhance the company's competitiveness and market share in the tools sector.










