Are covered call ETFs a good investment right now?

[Hernandez]

Hi guys,

What is your opinion on currently investing in Covered Call ETFs?

[Sophia]

Hi Hernandez,
In covered call ETFs, an investor gains profit by selling a call option on a particular asset on which he holds a long position.
Covered call ETFs have been on the rise over the recent years. They have gained massive attraction from investors seeking to customize and diversify their portfolio quickly as well as traders targeting specific industries, sectors, or countries.
The ability to target a specific sector means you don't have to stick with a broader market index when you can exploit better opportunities and more choices that your preferred sector offers.
Since the buyer of your call option has to pay a certain premium before buying it and you keep that premium no matter what, you'll make more money if the asset increase in value. And in an event the asset decline in value, you will mitigate loss since the premium will be used to offset the losses.
Considered a conservative investment approach, covered call EFTs are a great way of minimizing volatility and, at the same time, capturing some exposure to equity market gains.
With the downsize protection they offer when the market declines, the ability they provide to invest in specific sectors, and their opportunity for portfolio diversification—covered call ETFs are, therefore, worth investing in