Many options traders and more seasoned investors like to try to enhance the return on their positions through the use of call or put options. Novice investors not familiar with or comfortable with trading in options may stay away, but still like the idea of increasing the income generated by their portfolio. Within the last year, an ETF was launched that attempts to utilize just that strategy and do the options work for you. The Recon Capital NASDAQ 100 Covered Call ETF (NASDAQ:QYLD) utilizes a buy-write strategy for the biggest NASDAQ-traded companies and so far the results have been largely what you'd expect.
To provide a little background, the Recon ETF again utilizes a buy-write strategy - taking a long position in a stock while simultaneously selling a call option on the same stock in an attempt to generate additional income. Many traders use the covered call strategy for their own portfolios and there are other ETFs out there that use option-based approaches as well (the ALPS U.S. Equity High Volatility Put Write Index Fund (NYSEARCA:HVPW) is one of the largest), but the Recon ETF is unique because it is the only ETF out there that uses the covered call strategy solely on the NASDAQ 100.
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