First week of February 2022 Options trading for Vaneck Russia Etf (RSX) vectors
IInvestors in Vaneck Vectors Russia Etf (ticker: RSX) saw new options start trading this week, for the February 2022 expiration. One of the main data entering the price that an options buyer is willing to pay is time value. So, with 245 days to expiration, new trading contracts represent a possible opportunity for put or call options sellers to earn a higher premium than they would. be available for contracts with a shorter expiry date. AT Stock option channel, our YieldBoost formula walked the RSX options chain for new February 2022 contracts and identified a sale contract and a purchase contract of particular interest.
The contract to sell at the strike price of $ 22.00 has a current bid of 60 cents. If an investor were to sell to open this sales contract, they agree to buy the share at $ 22.00, but will also receive the premium, bringing the base price of the shares to $ 21.40 (before commissions broker). For an investor already interested in buying RSX shares, this could represent an attractive alternative to paying $ 28.86 / share today.
Since the strike price of $ 22.00 represents a discount of around 24% from the current share price (in other words, it is out of the money by that percentage), it is also possible that the sales contract expires worthless. Current analytical data (including Greeks and Greeks implied) suggests that the current chance of this happening is 93%. Stock Options Channel will be tracking these quotes over time to see how they evolve, posting a chart of these numbers on our website under contract detail page for this contract. If the contract expires worthless, the premium would represent a return of 2.73% on the cash commitment, or 4.06% annualized – at Stock Options Channel, we call that the YieldBoost.
Below is a chart showing the last twelve months trading history for Vaneck Vectors Russia Etf, and highlighting in green where the strike price of $ 22.00 is against that history:
As for the option chain calls, the $ 30.00 strike purchase contract has a current bid of $ 1.35. If an investor were to buy RSX shares at the current price level of $ 28.86 / share and then sell to open that purchase contract as a “covered call”, they agree to sell the share at 30, $ 00. Since the call seller will also receive the premium, this would generate a total return (excluding dividends, if applicable) of 8.63% if the stock was recalled at the February 2022 expiration (before broker commissions) . Of course, a lot of benefits could be left on the table if RSX shares really soar, which is why it becomes important to look at Vaneck Vectors Russia Etf’s last twelve months trading history, as well as ” study the fundamentals of the business. Below is a chart showing RSX’s past twelve months trading history, with the $ 30.00 strike highlighted in red:
Considering that the strike price of $ 30.00 represents a premium of around 4% over the current share price (in other words, it’s out of the money by that percentage), It is also possible that the covered purchase contract will expire worthless, in which case the investor would keep both his shares and the premium received. Current analytical data (including Greeks and Greeks implied) suggests that the current chance of this happening is 57%. On our website under contract detail page for this contract, Stock Options Channel will track these quotes over time to see how they change and publish a chart of these numbers (the option contract’s trading history will also be plotted). If the covered purchase contract expires worthless, the premium would represent a 4.68% increase in additional return to the investor, or 6.97% annualized, which we call the YieldBoost.
The implied volatility in the sales contract example is 39%, while the implied volatility in the purchase contract example is 23%.
Meanwhile, we calculate the actual volatility of the past twelve months (taking into account the closing values of the last 252 trading days as well as today’s price of $ 28.86) at 23%. For more put and call option contract ideas worth considering, visit StockOptionsChannel.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.