Investors in the Select Sector SPDR Trust – State Street Financial Select Sector SPDR ETF (XLF) began trading new options today, set to expire in March 2027. Notably, a put contract at a $36.00 strike price is currently bid at 88 cents, representing a commitment to purchase the stock at that price, effectively reducing the cost basis to $35.12. This strike price is approximately 27% below today’s trading price of $49.55, with an 85% chance that the put will expire worthless.
Additionally, a call contract at a $50.00 strike price is available at a current bid of $2.78. If executed as a covered call, it would yield a return of 6.52% if the stock is called away by March 2027. The current odds of this call expiring worthless stand at 44%. Implied volatility figures for the put and call contracts are 42% and 23%, respectively, while trailing twelve-month volatility is calculated at 19%.
