Investors in the Vanguard Index Funds Mid-Cap Value Index VIPER Shares (Symbol: VOO) saw new options trading begin on October 3, 2023, for June 2027 expiration contracts. With 449 days until expiration, these contracts provide an opportunity for sellers to achieve higher premiums compared to shorter-term options.
A notable put contract at the $600.00 strike price has a current bid of $42.00, allowing the seller to purchase shares at an effective cost basis of $558.00, compared to the current trading price of $606.60, representing a potential 1% discount. There is a 62% chance that this put contract may expire worthless, potentially yielding a 7.00% return on cash committed, annualized at 5.69%.
On the calls side, the $640.00 strike price has a bid of $46.50. If VOO’s shares are called away at this price, the total return could be 13.17%, with a 50% probability of the contract expiring worthless, which would yield an additional 7.67% return, or 6.23% annualized. The current trading price of VOO is $606.60, with an implied volatility of approximately 21% for the options.
