When you play with covered call ETFs, you can think of them as a piggy bank. A piggy bank is a container for coins. When you put coins into your piggy bank, you're essentially putting money into it. But when you take money out of your piggy bank, it reduces the amount of money in it. The same principle applies to covered call ETFs.
A covered call ETF is like a piggy bank that collects income from selling options, but it also has to distribute that income to its shareholders every month. When the ETF distributes the income, it's like taking money out of the piggy bank.
Now, imagine if the amount of income you collect every month from selling options keeps reducing. This is like the coins in your piggy bank getting smaller every month. In the case of JEPI, the amount of income they collect from selling options has reduced over the past year and a half. This is similar to a situation where the coins in your piggy bank have been getting smaller.
However, with SPYI, the amount of income it collects from selling options has remained stable, similar to a situation where the coins in your piggy bank have remained the same size.
So, when you invest in a covered call ETF like SPYI, you can expect a consistent and predictable income every month. This is because the income the ETF collects from selling options is not reducing, similar to the situation where the coins in your piggy bank are not getting smaller. This can provide stability and predictability to your portfolio.
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Keywords:
- ETF, Covered Call, Tax-Efficient, S&P 500, Monthly Income, NEOS S&P 500 High Income ETF, SPYI,
- Factors:
- S&P 500 High Income ETF SPYI,
- Year-to-Date Total Performance,
- Monthly Distribution History,
- Tax-Efficiency,
- Section 1256 Contracts,
- S&P 500 Index,
- JEPI,
- JPMorgan Equity Premium Income ETF,
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