QYLD - QYLD: Likely To Thrive Off Volatility Throughout The Remainder Of 2024

2024-06-05 10:21:16 ET

Summary

• The Global X NASDAQ 100 Covered Call ETF offers a high dividend yield above 11% and exposure to top companies.
• QYLD's option strategy limits upside potential but generates income through covered call writing.
• QYLD is best suited for investors prioritizing income and looking to complement their portfolio with additional diversification.
• At-the-money call writing caps upside potential while still exposing you to the full downside risks. I believe out-the-money option ETFs may be a better alternative.

Overview

Covered call ETFs make it possible to collect very large yields from relatively small investments. This makes them popular asset classes amongst investors that value income. The Global X NASDAQ 100 Covered Call ETF ( QYLD ) offers a very large dividend yield above 11% while also providing exposure to the best companies in the world. However, the inclusion of an option strategy leaves some vulnerabilities that investors should be aware of. As a result of these vulnerabilities, the price has consistently traded downward over time since its inception in 2013....

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