YUMC Option Call 15-01-2027 40 Option on Yum China Holdings

An 'In The Money' option is one with a strike price that the current stock price has already surpassed. Some options investors can hedge their Yum China positions using in-the-money options. They may also want to buy options with some intrinsic value, not just time value. However, because in-the-money options on Yum Stock have intrinsic value and are priced higher than out-of-the-money options in the same chain, their volatilities are relatively smaller.

Buying Yum China's call option is the simplest of option trades. A call option on Yum Stock gives investors the right (but not the obligation) to purchase Yum China at the given strike price. Therefore Yum China's call intrinsic value or payoff at expiration depends on where the Yum Stock price is relative to the call option strike price. The strike price of 40.0 is the critical point that divides the payoff function into two parts. Below the strike, the payoff chart is constant and negative (the trade is a loss). Above the strike, the payoff line is upward sloping as the option payoff rises in proportion with Yum China's price. Finally, at the break-even point of 40.0, the line crosses zero, and trading Yum becomes profitable.

By selling Yum China's call option, the investors signals his or her bearish sentiment. A short position in a call option written on Yum China will generally make money when the underlying price goes down. Therefore Yum China's call intrinsic value or payoff at expiration depends on where the Yum Stock price is relative to the call option strike price. The strike price of 40.0 is the critical point that divides the payoff function into two parts. Below the strike, the payoff chart is constant and positive (the seller makes a profit). Above the strike, the payoff line is downward sloping as the option payoff drops in proportion to Yum China's price. Finally, at the break-even point of 40.0, the line crosses zero, and trading Yum becomes disadvantageous with no downside limits.

Yum China's option chain is a display of a range of information that helps investors for ways to trade options on Yum. In general, an option chain provides a helpful tool for investors to see all available option contracts, both puts, and calls, for Yum. It also shows strike prices and maturity days for a Yum China against a given expiration period. The table below combines all the option information in the form of a chain but before you use it, remember that it entails significant risk and it is not for everyone.

Check out Your Current Watchlist to better understand how to build diversified portfolios, which includes a position in Yum China Holdings. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in population. You can also try the Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

Is Hotels, Restaurants & Leisure space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Yum China. If investors know Yum will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Yum China listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.

The market value of Yum China Holdings is measured differently than its book value, which is the value of Yum that is recorded on the company's balance sheet. Investors also form their own opinion of Yum China's value that differs from its market value or its book value, called intrinsic value, which is Yum China's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Yum China's market value can be influenced by many factors that don't directly affect Yum China's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.

Please note, there is a significant difference between Yum China's value and its price as these two are different measures arrived at by different means. Investors typically determine if Yum China is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Yum China's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.