New Options Available for VanEck Merk Gold ETF Investors
Investors in the VanEck Merk Gold ETF (Symbol: OUNZ) can explore new options this week that are set to expire on May 16th. At Stock Options Channel, our YieldBoost formula has scanned the OUNZ options chain for these new contracts, identifying one put option and one call option worth noting.
Put Contract Insights
The put contract at the $29.00 strike price currently has a bid of 5 cents. If an investor decides to sell-to-open this put option, they agree to buy the stock at $29.00 while also collecting the premium. This arrangement results in an effective cost basis of $28.95 per share (before broker commissions). This strategy could appeal to investors interested in acquiring shares of OUNZ without directly paying the current price of $29.25 per share.
Since the $29.00 strike price offers about a 1% discount to the current trading price, it is somewhat out-of-the-money. There is a 54% chance that the put option will expire worthless, according to current analytical data including greeks and implied greeks. Stock Options Channel will monitor these odds over time, providing updates on our website for this contract. Should the contract expire worthless, the premium would yield a return of 0.17% on the cash commitment or an annualized rate of 1.21%, a figure we refer to as YieldBoost.
Trading History Chart
Below is a chart depicting VanEck Merk Gold ETF’s trailing twelve-month trading history. The green highlight indicates where the $29.00 strike price is situated within that history:
Call Contract Details
On the call side, the contract at the $30.00 strike price also has a bid of 5 cents. If an investor buys shares of OUNZ at the current market price of $29.25 and simultaneously sells-to-open this call option as a “covered call,” they are agreeing to sell the stock at $30.00. This trade would yield a total return of 2.74% (excluding dividends) if the stock is called away by May 16th, before broker commissions are considered. However, investors should note that significant upside may be missed if OUNZ shares appreciate substantially.
Analyzing OUNZ’s trailing twelve-month trading history is essential, as is studying the underlying business fundamentals. Below is a chart of the ETF’s trading history, highlighting the $30.00 strike price in red:
The $30.00 strike price sets a 3% premium over the current trading price, suggesting it is also out-of-the-money by that percentage. The current odds of the covered call expiring worthless stand at 63%, indicating the potential for investors to retain both their shares and the premium collected. Stock Options Channel will track these odds and publish a chart outlining the historical performance of this option. If the covered call expires worthless, the premium will contribute an additional return of 0.17% or an annualized rate of 1.20%, another instance of our YieldBoost.
The implied volatility for the put contract is currently 36%, while the call contract exhibits an implied volatility of 20%. In comparison, we calculate the actual trailing twelve-month volatility based on the last 250 trading days, coupled with today’s price of $29.25, as being 15%. For additional put and call options contract ideas, visit StockOptionsChannel.com.
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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.
