Investors in the Select Sector SPDR Trust – State Street Financial Select Sector SPDR ETF (NYSE: XLF) will see new options trading starting today, with a notable focus on a call contract set to expire on September 25th. The call contract is at a $59.00 strike price, currently bidding at 77 cents.
If an investor buys XLF at the current price of $57.93 and sells this covered call, they may achieve a total return of 3.18% by expiration, excluding dividends and commissions. The $59.00 strike represents a 2% premium over the current trading price, with a 56% probability that the contract may expire worthless, allowing the investor to keep both the shares and the premium, equating to a potential additional return of 1.33%, or 9.70% annualized.
The implied volatility for this call contract stands at 15%, aligning with the trailing twelve-month volatility of 15% based on the last 251 trading days.
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