New Options Trading Insights for iShares Trust IEF

A recent report highlights fresh options trading for iShares Trust - iShares 7-10 Year Treasury Bond ETF (IEF) with a focus on February 2025 contracts. The analysis offers potential investment strategies via put and call options, presenting opportunities for both yield and risk management.

Date: 13-11-2024

AI Rating: 7

The report provides insight into new options trading for iShares Trust - iShares 7-10 Year Treasury Bond ETF (IEF) ahead of February 2025 expirations. It details specific put and call contracts, making it relevant for investors considering options strategies.

One notable aspect is the put contract at the $93.00 strike price, with a current bid of $1.06. For an investor selling this put contract, there is a commitment to buy shares at $93.00, while the premium collected reduces the effective purchase price to $91.94. This situation presents an attractive entry point, especially since the put offers a potential return of 4.16% annualized if it expires worthless. The current odds of this happening are noted at 59%, which suggests a favorable scenario for the put seller.

Simultaneously, on the call contract side, the report mentions a $95.00 strike price with a current bid of $1.12. If an investor buys IEF and sells this covered call, they commit to selling at $95.00, potentially yielding a total return of 2.80% if the stock appreciates to that level upon expiration. However, if the call expires worthless (with odds at 60%), the investor retains both the premium and shares, which translates to a 4.37% annualized return on the premium collected.

Furthermore, the implied volatility figures for the put and call contracts are noted at 8% and 9%, respectively, against a trailing twelve month volatility of 7%. This information aids in assessing option pricing and trading strategies.

Stocks: IEF