Vanguard Tax-Exempt Bond ETF (VTEB) Straddle

Trading a VTEB straddle lets you take a pure volatility position on Vanguard Tax-Exempt Bond ETF without committing to a direction. Vanguard Tax-Exempt Bond 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 VTEB straddle pricing in real time and find the moments when expected moves are mispriced.

A long straddle on VTEB 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 Vanguard Tax-Exempt Bond 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 VTEB straddle price to historical realized moves helps you judge whether the market is overpaying or underpaying for volatility.

The investment objective of this index fund is to seek to track the performance of a benchmark index that measures the investment-grade segment of the U.S. municipal bond market. The fund employs an indexing investment approach designed to track the Standard & Poor’s National AMT-Free Municipal Bond Index using a sampling technique to closely match key benchmark characteristics. All of the fund’s investments will be selected through the sampling process, and at least 80% of the fund’s assets will be invested in securities held in the index. Under normal circumstances, at least 80% of the fund’s assets will be invested in securities whose income will be exempt from federal income taxes and the federal alternative minimum tax.

Risks of the fund include the fact that changes in interest rates can affect the fund by resulting in lower bond prices (when interest rates go up) or an eventual decrease in income for the fund (when rates decline). Investors who are looking for a fund that may provide federal tax-exempt income and can tolerate moderate price and income fluctuations may wish to consider this fund.With respect to 75% of its total assets, the fund may not: (1) purchase more than 10% of the outstanding voting securities of any one issuer or (2) purchase securities of any issuer if, as a result, more than 5% of the fund’s total assets would be invested in that issuer’s securities; except as may be necessary to approximate the composition of its target index. This limitation does not apply to obligations of the U.S. government or its agencies or instrumentalities.

Earnings, product cycles, macro prints — any time volatility itself is the trade, the VTEB straddle is the cleanest expression of that view. Our scanner prices every VTEB 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 VTEB straddle into a catalyst or short a VTEB straddle to harvest decay, the options straddle setups that matter are all in one place.