Investors in the United States Oil Fund (USO) have new options available for July 1st, including a put contract at the $109.00 strike price with a bid of 83 cents, and a call contract at the $125.00 strike with a bid of 90 cents. The $109.00 put offers a potential cost basis of $108.17 per share, a 7% discount from the current trading price of $116.67, with a 79% chance of expiring worthless, which would yield a 0.76% return or 18.53% annualized.
Conversely, the $125.00 call represents a 7% premium to the current share price, with a 73% chance of expiring worthless. A successful exercise would yield a 7.91% total return (excluding dividends) if shares are sold at expiration. If it expires worthless, the premium collected would represent a 0.77% return or 18.77% annualized.
Implied volatilities are 44% for the put and 50% for the call, while actual trailing twelve-month volatility is calculated at 44%.
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