Sammam Mo-sa (Samsam Mo-sa)

Sammam Mo-sa (Samsam Mo-sa)

It is said that the balance of covered call ETFs is increasing rapidly these days. It is popular because it is given 7% 10%, 12% stable dividends per year, but there is nothing free in the world. You can receive a premium from selling options, but the profit from rising stock prices is limited.  

For example, when comparing the performance of QQQ and Nasdaq Covered Call QYLD listed in the United States, QQQ generated 496.05% of revenue since June 25, 2014, while QYLD lost 27.3%. Even considering monthly dividends, the yield difference is quite large.

Of course, a covered call cannot be said to be advantageous unilaterally because it is disadvantageous if the stock price rises steadily and is advantageous if it falls sideways or sideways. However, when the stock price falls, the loss of the option premium is slightly small, and even in a sideways phase, if short-term volatility is high, profits are often not good.

The higher the dividend yield, the more options sold, so of course, ETF prices are bound to widen over time with ETFs with naked or relatively low dividend yields.

However, it is said that a covered call ETF has come out that has overcome such shortcomings this time. It is said that by reducing the option selling cycle, it increased the proportion of option selling and increased the participation rate in the stock price increase, improving the shortcomings of the existing high dividend covered call.

Where in the world is there free?

Selling short-lived options will increase the option premium, but the gamma risk increases, increasing the volatility risk. How many ETF investors are aware of this?  

I don't think marketing this way is really right. And wouldn't the shorter the option selling period, the more various costs, such as selling options, as well as gamma risks, be negative for profits?