Investors in the Select Sector SPDR Trust – State Street Consumer Discretionary Select Sector SPDR ETF (XLY) saw new options trading commence today with contracts expiring on June 5th. Key contracts include a $117.50 put option with a bid of $1.30 and a $119.50 call option with a bid of $1.60. The current trading price for XLY is $118.12.
If executed, the $117.50 put contract would allow participants to purchase shares at an effective cost basis of $116.20, reflecting a potential discount of 1%. The probability of this contract expiring worthless is estimated at 55%. Meanwhile, the $119.50 call option could yield a total return of 2.52% if the stock is called away, with a 53% chance of expiring worthless, thereby keeping both the shares and the premium.
Implied volatility for the put and call contracts is recorded at 23% and 25% respectively, while trailing twelve-month volatility stands at 19%.
