Investors Explore New QQQ Options: March 19 Contract Insights
Today marks the start of new options trading for the Invesco QQQ Trust (Symbol: QQQ), specifically for contracts expiring on March 19th. At Stock Options Channel, our YieldBoost formula has analyzed the QQQ options chain and identified a put and a call contract of notable interest.
Put Contract Analysis
The put contract at a $491.00 strike price currently has a bid of $8.21. Investors who sell-to-open this put contract are agreeing to purchase shares at $491.00, while also collecting the premium. This moves the effective cost basis to $482.79 per share, before broker commissions. For those considering a purchase of QQQ shares, opting for this approach may be more cost-effective compared to buying at the current price of $495.52/share today.
This $491.00 strike price represents roughly a 1% discount from the current trading price, meaning it is out-of-the-money by that percentage. Current data suggests a 61% likelihood that this put contract could expire worthless. We will continue tracking these odds and provide updates on our website, including a chart under the contract detail page. Should the put expire worthless, the premium reflects a 1.67% return on the cash commitment, implying a significant 43.72% annualized return—an opportunity we refer to as the YieldBoost.
Below is a chart showing the trailing twelve-month trading history for the Invesco QQQ Trust, with the $491.00 strike highlighted in green:
Call Contract Insights
On the call side, the contract with a $500.00 strike has a bid of $9.70. Investors who buy QQQ shares at the current $495.52/share price and then sell-to-open this call contract as a “covered call” are committing to sell at $500.00. Adding in the premium received raises total expected returns (excluding dividends) to 2.86% if the shares are called away at expiration on March 19th. However, should QQQ shares rise significantly, there may be substantial upside left unrealized. Therefore, analyzing QQQ’s trailing twelve-month trading history and assessing business fundamentals is critical. Below is a chart showing QQQ’s trailing twelve-month trading history, with the $500.00 strike marked in red:
The $500.00 strike reflects a 1% premium over the current trading price, indicating a potential for the covered call to expire worthless. Should that occur, the investor retains both their shares and the collected premium. Data shows a 52% chance of this scenario. We will monitor these odds over time and provide updates on our website, including a chart of this option contract’s trading history. If the covered call expires worthless, the premium translates to a 1.96% additional return for the investor, or 51.19% annualized, another instance of our YieldBoost.
For the put contract example, the implied volatility stands at 29%, while the call example shows an implied volatility of 28%. The calculated trailing twelve-month volatility, factoring in the last 250 trading days and today’s price of $495.52, is 18%. For more opportunities with put and call options, visit Stock Options Channel.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
