Investors in the 2X Long VIX Futures ETF (UVIX) can now trade new options expiring on December 18, 2023. The new contracts, with 254 days until expiration, offer an opportunity for premium collection; notably, a $6.00 put option has a current bid of $0.50. This puts the effective purchase price for shares at approximately $5.50 if sold-to-open, representing an 11% discount to the current stock price of $6.76.
On the call side, a $8.00 strike price is available with a bid of $1.00. Selling this covered call at the current price could yield a total return of 33.14% if exercised by expiration. With the call option being 18% out-of-the-money, there is a 25% chance it may expire worthless, allowing investors to keep the premium and their UVIX shares. Implied volatilities stand at 178% for puts and 187% for calls, while the trailing twelve-month volatility is calculated at 128%.
