IVV Options Trading Starts on October 16th

Investors in the iShares Trust – Core S&P 500 Exchange Traded Fund (IVV) have new options trading available as of today, with expiration set for October 16th. The $735.00 put contract has a current bid of $15.60, offering a potential cost basis of $719.40 if sold, representing a 2.12% return on cash commitment, or 9.81% annualized, should it expire worthless. This strike price is approximately 1% lower than IVV’s current trading price of $739.35.

On the call side, the $750.00 call contract is bid at $18.10. By purchasing IVV shares at $739.35 and selling this call as a covered call, investors could achieve a total return of 3.89% if the stock is called away by October 16th. This strike also represents about a 1% premium over the current price, with a 52% probability that it could expire worthless, allowing the retention of both the shares and premium, translating to a 2.45% extra return or 11.31% annualized.

Implied volatility for both put and call contracts is around 16%, while the trailing twelve-month volatility stands at 13%. Investors can monitor the evolving odds and additional contract details on the Stock Options Channel.