"Actively managed strategies that write calls on individual holdings can leave more upside on the table and take advantage of spikes in implied volatility around events like earnings."
"Systematic buy-write strategies often result in a lopsided risk-reward profile where most of your upside is capped, while the income received is taxable and doesn't significantly offset downside risk."
"There are other, less talked-about strategies that can push yields into the 10% range, but they still carry risks, which may manifest as credit risk depending on the strategy."
"Fixed income is a broad universe with a wide range of risk-return profiles, and advanced ETF investors can find options that deliver double-digit yields without relying on covered calls."
Actively managed covered call strategies allow for more selective security and strike price choices, potentially capturing upside during volatility spikes. Systematic buy-write strategies often cap upside and provide limited downside protection, leading to a poor risk-reward profile. Alternative high-income strategies exist, including fixed income and hybrid approaches, which can yield over 10% without options. Business Development Companies (BDCs) are highlighted as a way to access private credit, though they face challenges amid market concerns.
Read at 24/7 Wall St.
Unable to calculate read time
Collection
[
|
...
]