Investors in iShares Trust – iShares 20+ Year Treasury Bond ETF (TLT) can now explore new September 2nd options, including a put contract at a $81.00 strike price with a current bid of 55 cents. If sold, the investor commits to buy shares at $81.00, effectively lowering the cost basis to $80.45. This represents a 1% discount compared to the current trading price of $81.52 and carries a 60% chance of expiring worthless, potentially yielding a 0.68% return on cash committed.
Additionally, there is a call contract at the $82.00 strike price with a bid of 44 cents. Selling this as a covered call while owning shares at $81.52 could generate a 1.13% return if exercised, reflecting a 62% probability of expiring worthless. In this case, it would yield a 0.54% boost, or 13.13% annualized, if the contract does not get exercised.
The implied volatility for the put contract is 12%, while for the call contract, it is 10%. The current stock price stands at $81.52.
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