Investors in the SPDR Series Trust – State Street SPDR S&P Regional Banking ETF (KRE) can now access new options contracts expiring in September 2027. The put contract at the $40.00 strike price has a current bid of $1.18, implying a cost basis of $38.82 for those looking to buy KRE shares, which are currently priced at $69.31—a 42% discount. Analytical data suggests a 93% chance this contract could expire worthless.
On the call side, a $75.00 strike price contract is available with a bid of $7.25. Selling this covered call while owning KRE shares at the current price would yield an 18.67% total return by expiration, assuming the shares are called away. However, there’s a 51% chance that this contract would also expire worthless, allowing investors to retain both their shares and the premium, which equates to a 10.46% additional return.
The put contract’s implied volatility stands at 40%, while the call option has an implied volatility of 29%. The actual trailing twelve-month volatility of KRE is calculated at 24%.
