Investors in the iShares Core S&P Total US Stock Market ETF (ITOT) saw new options trading begin on May 15, 2023. Notable contracts include a $142.00 put option with a current bid of $2.00, which allows investors to purchase shares at a $140.00 cost basis, a 1% discount from the current share price of $143.40. The odds of this put expiring worthless are approximately 58%, potentially yielding a 1.41% return on cash commitment, or 9.02% annualized.
Additionally, a covered call option at the $145.00 strike price is currently bidding at $2.45. If ITOT shares are sold at this level, investors could see a total return of 2.82% (excluding dividends) at the May 15 expiration. The likelihood of this call expiring worthless stands at 51%, which would yield a return boost of 1.71%, or 10.94% annualized.
Implied volatility for both contracts is around 22%, while the actual trailing twelve-month volatility is calculated at 18%.
