Altria's MO Options: March Momentum Trading Opportunity

Traders and income-focused investors monitoring Altria Group Inc (ticker: MO) have a fresh opportunity this week as new call and put option contracts launched for the March 13th expiration date. The Stock Options Channel team analyzed the options chain to identify contracts with compelling risk-reward profiles, particularly for those seeking money-generating strategies through covered call positions.

The Covered Call Money-Making Strategy

One particularly notable opportunity centers on the $62.00 strike call contract, currently priced with a 2-cent bid. For investors purchasing MO shares at the current market level of $61.44 per share, selling this call as a covered call position creates an interesting income model. This approach obligates the seller to deliver shares at $62.00 upon assignment, while also capturing the premium from the call sale. The combination yields a projected return of 0.94% by the March 13th expiration date, assuming shares are called away (broker fees excluded). While this may seem modest, consistent application of this money-making method across multiple positions can compound meaningfully over time.

Probability and Risk Considerations

The key variable determining success of this strategy is whether the contract expires worthless—allowing the investor to retain both the stock position and premium. Current analytical data suggests a 55% probability of expiration without assignment. If this scenario materializes, the premium collected represents a 0.03% immediate boost, or 0.28% when annualized through the YieldBoost metric.

However, investors must recognize the tradeoff inherent in this approach. Should MO shares significantly appreciate beyond $62.00, the stock gets called away at that lower level, capping gains. This is why analyzing Altria’s twelve-month price momentum and fundamental business model proves essential before committing capital.

Market Data and Volatility Model

Current technical metrics reveal that implied volatility in the March $62.00 call stands at 26%, while the trailing twelve-month historical volatility calculates to 21% based on 251 trading day closing prices plus today’s $61.44 reference level. The $62.00 strike represents approximately 1% premium above the current trading price, meaning it remains out-of-the-money by that margin.

This moderate distance-to-strike positioning explains the relatively modest premium collected. A more aggressive money management approach might target higher strikes for greater premium capture, though that simultaneously increases the probability of assignment and foregoes additional upside potential.

For investors seeking additional covered call or cash-secured put opportunities across other holdings, Stock Options Channel provides comprehensive contract screening and tracking through their website.