Investors in Invesco QQQ Trust (NASDAQ: QQQ) can now trade new options expiring on August 12th. Notably, a put contract at the $660.00 strike price has a current bid of $9.53, allowing an investor to potentially buy shares at this price for a cost basis of $650.47, which is approximately 1% below the current trading price of $669.79. The likelihood of the put option expiring worthless stands at 65%, potentially resulting in a 1.44% return on the cash commitment or 37.65% annualized.
On the call side, a $680.00 strike price contract is trading with a bid of $11.69. If an investor buys shares at $669.79 and opts for this “covered call,” it would yield a total return of 3.27% if the option is exercised at expiration. The odds of this call contract expiring worthless are estimated at 55%, providing a potential extra return of 1.75%, or 45.50% annualized, if the shares remain unsold.
Current implied volatilities are 30% for the put and 27% for the call, while the actual trailing twelve-month volatility is measured at 19%.
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