Investors in the Select Sector SPDR Trust – State Street Utilities Select Sector SPDR ETF (XLU) can now trade new options set to expire in March 2027. These contracts feature a put option at a $43.00 strike price with a current bid of $1.38, offering a potential cost basis of $41.62 for shares, compared to the current trading price of $46.35. This put contract represents a 7% discount and has a 69% chance of expiring worthless, yielding a potential return of 3.21% on cash commitment, or 3.59% annualized.
On the call side, the $56.00 strike price call has a bid of $0.69. If exercised, it could yield a total return of 22.31%, assuming shares are sold at that price. This call option is 21% above the current trading price, with a 75% probability of expiring worthless, providing a 1.49% additional return, or 1.67% annualized. The implied volatility for the put contract is 27%, while the call’s is 19%.
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