iShares MSCI EAFE Value ETF Experiences Big Outflow Monday, April 24, 10:47 AM ET, by Market News Video Staff Symbols mentioned in this story: EFV, TEVA, AER, CYBR Exchange traded funds (ETFs) trade just ...
EFV: ETF Outflow Alert Thursday, May 18, 10:51 AM ET, by Market News Video Staff Symbols mentioned in this story: EFV Exchange traded funds (ETFs) trade just like stocks, but ...
EFV Crowded With Sellers Wednesday, May 31, 3:19 PM ET, by Market News Video Staff In trading on Wednesday, shares of the iShares MSCI EAFE Value ETF (EFV) entered into ...
EFV, CCEP, AER, TEVA: ETF Outflow Alert Friday, June 9, 10:47 AM ET, by Market News Video Staff Symbols mentioned in this story: EFV, CCEP, AER, TEVA Exchange traded funds (ETFs) trade just ...
EFV, CCEP, AER, TEVA: ETF Inflow Alert Tuesday, July 25, 11:18 AM ET, by Market News Video Staff Symbols mentioned in this story: EFV, CCEP, AER, TEVA Exchange traded funds (ETFs) trade just ...
First Week of EFV December 17th Options Trading
By Market News Video Staff, Thursday, April 29, 10:37 AM ET
Investors in Ishares Msci Eafe Value Etf (AMEX:EFV) saw new options become available this week, for the December 17th expiration. One of the key inputs that goes into the price an option buyer is willing to pay, is the time value, so with 232 days until expiration the newly available contracts represent a potential opportunity for sellers of puts or calls to achieve a higher premium than would be available for the contracts with a closer expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the EFV options chain for the new December 17th contracts and identified one put and one call contract of particular interest.
The put contract at the $49.00 strike price has a current bid of $1.00. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $49.00, but will also collect the premium, putting the cost basis of the shares at $48.00 (before broker commissions). To an investor already interested in purchasing shares of EFV, that could represent an attractive alternative to paying $52.40/share today.
Because the $49.00 strike represents an approximate 6% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 67%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 2.04% return on the cash commitment, or 3.21% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Ishares Msci Eafe Value Etf, and highlighting in green where the $49.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $53.00 strike price has a current bid of $1.45. If an investor was to purchase shares of EFV stock at the current price level of $52.40/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $53.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 3.91% if the stock gets called away at the December 17th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if EFV shares really soar, which is why looking at the trailing twelve month trading history for Ishares Msci Eafe Value Etf, as well as studying the business fundamentals becomes important. Below is a chart showing EFV's trailing twelve month trading history, with the $53.00 strike highlighted in red:
Considering the fact that the $53.00 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 52%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 2.77% boost of extra return to the investor, or 4.35% annualized, which we refer to as the YieldBoost.
The implied volatility in the put contract example, as well as the call contract example, are both approximately 25%.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $52.40) to be 21%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
This Article's Word Cloud:ChannelDecemberEafeIsharesMsciOptionsStockValueYieldBoostalsoavailablecallchartcontractcontractscoveredcurrentexpirationexpirefillColorgreekshistoryimpliedinvestorleftmonthoddsoptionoptionspremiumpricerepresentreturnsellsharesstockstrikethattheythisthosetimetradingtrailingtwelvewellwhichwillworthlesswould
Any ideas and opinions presented in all Market News Video clips are for informational and educational purposes
only, and do not reflect the opinions of BNK Invest, Inc. or any of its affiliates, subsidiaries or partners.
In no way should any content contained herein be interpreted to represent trading or investment advice.
None of the information contained herein constitutes a recommendation that any particular security, portfolio,
transaction, or investment strategy is suitable for any specific person. All viewers agree that under no
circumstances will BNK Invest, Inc,. its subsidiaries, partners, officers, employees, affiliates, or agents be held
liable for any loss or damage caused by your reliance on information obtained. Read Full Disclaimer.
X
Wait! Don't leave yet.
Want to receive our latest research absolutely free?
⤹
Click the button below for your complimentary copy of Your Early Retirement Portfolio: Dividends Up to 8.7%—Every Month—Forever.
You'll discover the details on 4 stocks and funds that pay you massive dividends as high as 8.7%.