Invesco Water Resources ETF (PHO) Straddle

Trading a PHO straddle lets you take a pure volatility position on Invesco Water Resources ETF without committing to a direction. Invesco Water Resources ETF's straddle involves buying (or selling) a call and a put at the same strike and expiration, profiting when the stock moves more (or less) than the combined premium implies. Use our scanner to evaluate PHO straddle pricing in real time and find the moments when expected moves are mispriced.

A long straddle on PHO profits from large moves in either direction and is a classic play into binary events like earnings, product announcements, or macro releases. A short straddle profits when Invesco Water Resources ETF stays range-bound and implied volatility contracts. The breakeven points are simple: strike plus total premium on the upside, strike minus total premium on the downside. Comparing the PHO straddle price to historical realized moves helps you judge whether the market is overpaying or underpaying for volatility.

The Invesco Water Resources ETF (Fund) is based on the NASDAQ OMX US Water Index (Index). The Fund generally will invest at least 90% of its total assets in common stocks and American depositary receipts (ADRs) and global depositary receipts (GDRs) of companies in the water industry that comprise the Underlying Index. The Underlying Index seeks to track the performance of US exchange-listed companies that create products designed to conserve and purify water for homes, businesses and industries. The Fund and the Index are rebalanced quarterly and reconstituted annually in April. As of 08/31/2022 the Fund had an overall rating of 5 stars out of 106 funds and was rated 3 stars out of 106 funds, 5 stars out of 99 funds and 5 stars out of 87 funds for the 3-, 5- and 10- year periods, respectively.

Source: Morningstar Inc. Ratings are based on a risk-adjusted return measure that accounts for variation in a fund's monthly performance, placing more emphasis on downward variations and rewarding consistent performance. Open-end mutual funds and exchange-traded funds are considered a single population for comparison purposes. Ratings are calculated for funds with at least a three year history. The overall rating is derived from a weighted average of three-, five- and 10-year rating metrics, as applicable, excluding sales charges and including fees and expenses. ©2022 Morningstar Inc. All rights reserved. The information contained herein is proprietary to Morningstar and/or its content providers. It may not be copied or distributed and is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance does not guarantee future results. The top 10% of funds in a category receive five stars, the next 22.5% four stars, the next 35% three stars, the next 22.5% two stars and the bottom 10% one star. Ratings are subject to change monthly. Had fees not been waived and/or expenses reimbursed currently or in the past, the Morningstar rating would have been lower. Ratings for other share classes may differ due to different performance characteristics.

Earnings, product cycles, macro prints — any time volatility itself is the trade, the PHO straddle is the cleanest expression of that view. Our scanner prices every PHO straddle against historical realized moves, flags expirations where the market is overpaying or underpaying for vol, and ranks setups by breakeven width and IV rank. Whether you're long a PHO straddle into a catalyst or short a PHO straddle to harvest decay, the options straddle setups that matter are all in one place.