Investors in the iShares MSCI EAFE ETF (Symbol: EFA) can trade new options expiring on July 17, 2023, starting today. Notably, a put contract at an $85 strike price is available with a bid of 98 cents, allowing investors to potentially purchase the underlying shares at a cost basis of $84.02. This represents a 13% discount to the current trading price of $97.17 per share.
For those considering call options, a contract at the $98 strike price has a current bid of $2.52. If shares are sold at this price, the total return could reach 3.45% if exercised, although there is a 50% chance the contract could expire worthless, allowing investors to retain both their shares and the premium received. Current implied volatility for the put contract is at 36%, while the call stands at 23%.
Overall, investors should note that the current odds of the $85 put expiring worthless are approximately 84%, while the $98 call has a 50% probability of doing the same.
