Covered call, also known as “buy-write” strategy, is one of the most popular and easiest option strategies. It is basing on purchasing equities or taking long positions in futures and taking a short position in call options. The strategy is designed for investors who invest in the equity market. If the stock price does not change or slightly increases, the option premium is the additional profit, which improves the profitability of the transaction. It is believed that portfolios basing on a covered call strategy are characterized by higher profitability and lower volatility than portfolios consisting solely of equities – covered call portfolios are therefore considered safer. The strategy is applied under the assumption that price of the underlying instrument will not be a subject to large fluctuations in the near future. Investors suffer losses if a price drop of the underlying instrument exceeds received premium given by the option.
Large-cap, Blend, Covered Call ETFs on average are in the medium-term down -11% in 4 months.
Silver, Precious metals, Commodity, Covered Call ETF is in the medium-term down -15% in 1 year.
|Symbol||Company Name||Price||Change||Total net assets||Total expense ratio|
|BWV||iPath Goldman Sachs Barclays Bank PLC iPath Exchange Traded Notes Linked to the CBOE S&P 500 BuyWrite Index Structured Product||69.94||0.3%|
|HSPX||Exchange Traded Concepts Trust II||45.71||0.05%|
|PBP||PowerShares S&P 500 BuyWrite Portfol ETF||21.47||0.75%|
|SLVO||Credit Suisse AG - Credit Suisse Silver Shares Covered Call Exchange Traded Notes||8.11||-0.49%||26.2 M||0.65%|
|VEGA||AdvisorShares Trust||27.66||0.14%||27.22 M|