Investors in Invesco QQQ Trust (Symbol: QQQ) are now presented with new options trading opportunities, with contracts set to expire on April 28th. An analysis from Stock Options Channel has identified noteworthy put and call contracts among the newly listed options.

Intriguing Put Contract Analysis

A put contract at the $455.00 strike price currently has a bid of $9.72. If an investor decides to sell-to-open this put contract, they commit to purchasing the stock at $455.00. By collecting the premium, the effective cost basis for the shares drops to $445.28, before accounting for broker commissions. This can be advantageous when compared to the current trading price of $460.81 per share.

The $455.00 strike price offers approximately a 1% discount to the prevailing share price, rendering it out-of-the-money by that percentage. Current data suggests a 59% probability that this put contract may expire worthless. Stock Options Channel will monitor these odds and present updated figures on our website’s contract detail page. Should the contract indeed expire worthless, the premium yields a 2.14% return on the cash commitment, equating to an annualized return of 55.70%, which we refer to as the YieldBoost.

Below, a chart displays the trailing twelve-month trading history for Invesco QQQ Trust, highlighting the position of the $455.00 strike price in green:

Noteworthy Call Contract Opportunity

On the call option side, there’s a contract at the $465.00 strike price with a current bid of $8.99. If an investor buys shares of QQQ at $460.81 and sells-to-open this call contract as a covered call, they are agreeing to sell the stock at $465.00. Including the premium collected, this scenario translates to a total potential return of 2.86%, assuming the stock is called away at expiration on April 28th, not including dividends and broker commissions.

However, potential upside may be limited if QQQ shares substantially increase in value, which emphasizes the importance of examining historical trading trends and company fundamentals. Below is a chart showing QQQ’s trailing twelve-month trading history, with the $465.00 strike indicated in red:

Given that the $465.00 strike price reflects about a 1% premium over the current stock price, there remains a chance that the covered call may expire worthless. In this case, the investor retains both the shares and the premium received. Current analytical data suggest a 54% likelihood of this occurring. Stock Options Channel will also track these odds and post updated data on the contract detail page. If the covered call were to expire worthless, the premium would offer a 1.95% additional return, or an annualized yield of 50.86%, also referred to as the YieldBoost.

Implied and Actual Volatility Data

The implied volatility for the put contract stands at 35%, while the call contract has an implied volatility of 31%. In contrast, the actual trailing twelve-month volatility, calculated from the last 250 trading days including today’s price of $460.81, is estimated at 25%. For further insights on additional viable put and call options, visit StockOptionsChannel.com.

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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.