Investors in the iShares Trust – iShares China Large-Cap ETF (FXI) witnessed the initiation of new options trading for the April 2027 expiration on [today’s date]. The newly traded put contract at the $34.00 strike price has a current bid of $2.13, equating to a cost basis of $31.87. This represents an approximately 7% discount to FXI’s current trading price of $36.74. The probability of the put expiring worthless is estimated at 69%, offering a potential 6.26% return on cash commitment.
Additionally, a call contract at the $38.00 strike price is available with a current bid of $3.15. If an investor buys shares at $36.74 and sells this covered call, they would commit to sell at $38.00, delivering a total return of 12% if executed. This call also has a 50% chance of expiring worthless, providing an 8.57% additional return if it does. The implied volatility for both contracts stands at approximately 26%, while actual trailing twelve-month volatility is calculated at 20%.
