Post #755 by rayvt on the Retirement Investing board

Personal Finance Topics / Retirement Investing

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Income strategy ETFs using covered calls are BS, says Ben Felix:
https://youtu.be/ygVObRx9X68?si=AByrxS-eOkB6vGOZ

I saw that a few days ago. (The youtube algorithm is interesting, this one popped up even though I almost never watch investing videos.)

Covered calls are a hot point of contention. The newbie investing cohort sees then as free money.
See, for example, https://money.usnews.com/investing/articles/high-y...

The logic of asymmetry of returns says that they are a net loser, like Blackjack and Roulette.

Yet it is claimed that covered call ETFs are popular and profitable.

It's difficult to see it in the backtests, since most covered call ETFs are quite new. The best I could find goes back only 7 years: https://testfol.io/?s=2EcPOvxJtfm

There is ETW, which started 11/21/2005. 20 year backtest. https://testfol.io/?s=7IMcLb6hPvP

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