Investors in the State Street SPDR S&P 500 ETF Trust (SPY) gained access to new options today, expiring on November 20th. Notably, a put contract at a $730.00 strike price has a current bid of $30.48, allowing sellers to potentially buy shares at an effective cost of $699.52—about a 1% discount from the current trading price of $736.20. The likelihood of this put expiring worthless is estimated at 60%, which could yield a 4.18% return on cash commitment, or 7.94% annualized.
Additionally, a call contract at a $750.00 strike price has a bid of $35.66. Selling this covered call while holding shares at the current price would result in a total return of 6.72% if the stock is called away at expiration. This contract is approximately 2% above the current price, with an estimated 49% chance of expiring worthless, potentially offering a 4.84% extra return, or 9.21% annualized. Implied volatility for both contracts stands at around 18%, while actual trailing volatility is calculated to be 12%.
5 Stocks Our Experts Predict Could Double In the Next Year
By submitting your email, you'll also get a free pivot & flow membership. A free daily market overview. You can unsubscribe at any time.
