Investors in the VanEck ETF Trust – Semiconductor ETF (SMH) can now access new options expiring on October 16, 2023. Notably, a put contract at a $390 strike price has a current bid of $37.30, allowing a potential cost basis of $352.70 per share if exercised, compared to the current trading price of $399.71. This represents a 2% discount from the market price, with a 62% chance of the contract expiring worthless, yielding a 9.56% return on the cash commitment, equating to 17.03% annualized.
On the call side, a contract at a $415 strike price is bid at $40.55. If an investor sells this as a covered call after purchasing shares at $399.71, they could achieve a total return of 13.97% by October 16, assuming the stock is called away. The probability of the covered call expiring worthless stands at 47%, potentially resulting in a 10.14% additional return, or 18.06% annualized.
Implied volatilities are 40% for puts and 38% for calls, with actual trailing twelve-month volatility calculated at 36%. For ongoing tracking and additional options insights, visit StockOptionsChannel.com.
