New Options for iShares Russell Top 200 Growth ETF Present Opportunities

Investors in the iShares Trust – iShares Russell Top 200 Growth ETF (Symbol: IWY) received new options this week, set to expire on August 15th. With 163 days until expiration, these newly available contracts offer potential for higher premiums compared to those that expire sooner, as the time value is an important factor influencing option pricing. Stock Options Channel’s YieldBoost formula has analyzed the IWY options chain and identified a noteworthy put and call contract.

Put Option Insights

The $215.00 strike price put contract currently holds a bid of $6.70. An investor selling this put would agree to buy the stock at $215.00 while also collecting the premium, which effectively lowers the cost basis for the shares to $208.30 (excluding broker commissions). This option may appeal to investors wishing to acquire IWY shares at a discount compared to the current trading price of $223.85/share.

This $215.00 strike represents an approximate 4% discount from the current stock price, indicating it is out-of-the-money. The analytical data, including options greeks and implied volatility metrics, suggest a 66% chance that the put option may expire worthless. Stock Options Channel will continue to monitor these odds and publish updates on our website, including a detailed chart of this data. If the put expires worthless, the premium would yield a 3.12% return on the cash commitment, or an annualized 6.98%, which we refer to as YieldBoost.

Call Option Considerations

On the call side, a $225.00 strike price contract currently has a bid of $11.90. For investors buying shares of IWY at the current price of $223.85/share and selling this call as a “covered call,” they would be committing to sell the shares at $225.00. This approach, including the collected premium, would provide a total return of 5.83% if the stock is called away at the August 15th expiration (excluded dividends and broker commissions).

However, should IWY shares increase significantly, there is a risk of missing out on greater upside. Thus, evaluating IWY’s trading history and business fundamentals is crucial. Below, a chart illustrates IWY’s trading history with the $225.00 strike highlighted in red:

The $225.00 strike represents roughly a 1% premium to the current stock price, or slightly out-of-the-money. Consequently, there is a possibility that this covered call could also expire worthless, allowing the investor to retain both the shares and the received premium. Current analytical data suggests that the odds of this happening are estimated at 45%. Stock Options Channel will track this data over time and provide charts on our website, including the trading history for this option contract. In the event the call expires worthless, the premium would equate to a 5.32% additional return, or an annualized 11.91%, supported by our YieldBoost concept.

Volatility Measures

The implied volatility for the put contract is currently 22%, while the call contract has an implied volatility of 21%. In contrast, our analysis shows the actual trailing twelve-month volatility, based on the last 250 trading day’s closing values and the current price of $223.85, stands at 19%. For additional ideas on put and call options contracts, visit StockOptionsChannel.com.

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also see:

• PSYK Videos
• CNVY market cap history
• SBSI YTD Return

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.