2024-04-23 01:26:32 ET
Summary
- JPMorgan Nasdaq Equity Premium Income ETF is one of the largest ETFs engaged in short-volatility bets.
- Many analysts and news sites have been warning about 'Volmageddon 2.0' in recent days due to the proliferation of option-selling funds like JEPQ.
- The risks of JEPQ being wiped out like the XIV are overblown, as JEPQ's buy-write strategy does not have the same risks as the traditional 'short volatility' strategies.
- Instead, investors should consider overvaluation in JEPQ's portfolio and the long-term underperformance of the strategy due to its 'capped upside/uncapped downside' nature.
Recently, I have seen many investment analysts and news outlets discuss the possibility of 'Volmageddon 2.0' (Figure 1)....
Read the full article on Seeking Alpha
For further details see:
JEPQ: Volmageddon 2.0 Fears Overblown