Investors in the Invesco Exchange-Traded Fund Trust – S&P 500 Equal Weight ETF (Symbol: RSP) can now trade new options set to expire on October 16, 2023. The introduction of these contracts occurs with 86 days until expiration, presenting potential opportunities for options sellers to secure higher premiums compared to those with shorter timeframes.
The put contract at the $205.00 strike price currently bids at 95 cents, allowing investors to commit to buying shares of RSP at that price, adjusting their cost basis to approximately $204.05, which is about 4% lower than the current share price of $213.72. The analytics indicate a 73% likelihood that this contract may expire worthless, translating to a 0.46% return or 1.97% annualized if it does.
On the call side, a $215.00 strike contract is priced at $3.40, enabling investors to sell shares at this price if purchased at $213.72. The total return could reach 2.19% if the stock gets called away by expiration. This call strike represents a 1% premium over the current trading price, with a 50% chance it may expire worthless, providing a possible 1.59% yield boost, or 6.75% annualized.
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