Investors in the iShares MSCI Emerging Markets ETF (Symbol: EEM) gained access to new options contracts today, set to expire on August 21. The put contract at a $64.00 strike price currently has a bid of $0.99, allowing investors to establish a cost basis of $63.01 per share. This represents an approximate 1% discount to the current trading price of $64.73, with a 57% likelihood that the contract could expire worthless.
On the call side, a $69.00 strike price contract is available with a bid of $1.14. If exercised, this could yield an 8.36% return if shares are called away by the expiration date. Currently, there’s a 62% chance that the covered call will expire worthless, enabling investors to retain their shares and the premium collected. The implied volatility for the put is 26%, while the call is at 29%.
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