Tag Archives: covered call
Exploring Dividends Down Under
What’s driving demand for index-based access to dividends in Australia? S&P DJI’s Jason Ye surveys the dividend landscape in the Australian market and examines how market participants are using indices in the search for yield.
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Ausbiz, Australia, Australia FA, buy-write, Dividend, dividend income, dividend opportunities, dividends, factors, factors and dividends, high dividend, income strategies, Jason Ye, options, S&P/ASX 200, S&P/ASX 200 High Dividend Index, S&P/ASX 300, S&P/ASX Sustainability Screened Dividend Opportunities Index, yield
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- Ausbiz, Australia, Australia FA, buy-write, Dividend, dividend income, dividend opportunities, dividends, factors, factors and dividends, high dividend, income strategies, Jason Ye, options, S&P/ASX 200, S&P/ASX 200 High Dividend Index, S&P/ASX 300, S&P/ASX Sustainability Screened Dividend Opportunities Index, yield
Dividends and Option Premiums: A Dual Income Story
Income generation may be sought out by a variety of market participants, including those nearing retirement and those seeking a source of passive income. An income-focused strategy requires a different approach to those focused on generating growth. Traditional sources of income include dividend-paying stocks and coupon-paying bonds. The economic landscape of the past 18 months…
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2023, call options, diversification, dividend coverage ratio, dividend yield, dividends, Dow Jones U.S. Dividend 100 3% Premium Covered Call Index, Dow Jones U.S. Dividend 100 7% Premium Covered Call Index, Dow Jones U.S. Dividend 100 Index, institutional investor, multi-asset, S&P 500 Dividend Aristocrats, volatility
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- 2023, call options, diversification, dividend coverage ratio, dividend yield, dividends, Dow Jones U.S. Dividend 100 3% Premium Covered Call Index, Dow Jones U.S. Dividend 100 7% Premium Covered Call Index, Dow Jones U.S. Dividend 100 Index, institutional investor, multi-asset, S&P 500 Dividend Aristocrats, volatility
Income Generation and the S&P/ASX BuyWrite Index
In my last blog, we discussed the performance characteristics of the S&P/ASX BuyWrite Index. We will now focus on the income-generating feature of this index. As a reminder, a covered call strategy involves selling a call option against an asset that is already owned by the option writer. A systematic long-term covered call strategy generates…
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18-Year Performance of the S&P/ASX BuyWrite Index
The volatile and unpredictable nature of the stock market is characterized by periods of ups and downs. Covered call option writing is a strategy aimed at generating income and mitigating loss, particularly in bear market environments. A covered call (or “buy-write”) strategy involves selling a call option against an asset that is already owned by…
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While Fixed Income Yields Remain Low, Theta Gang Generates Income through Covered Calls
In response to the economic ravages of COVID-19, central banks and investors around the world went on a bond buying spree, pushing fixed income yields down and complicating the search for portfolio-generated income. While yields are generally off their March 2020 extremes, by historical standards they remain quite diminished. One alternative strategy to generate supplemental…
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Multi-Asset Income Strategies in a Low Interest Rate Environment
One of the most significant characteristics of the post-financial crisis world has been the global persistence of low, or even negative, interest rates. The entire U.S. Treasury curve yielded below 1% for the first time in history on March 9, 2020, in the wake of the COVID-19 pandemic, before the long end reverted recently on…
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Good Calls and Bad Calls of Covered Calls
Generally investors use covered calls to earn extra income from investments they think might not have much upside potential. For example, if a CEO has a very large stock holding in his or her company but doubts the stock price will increase (or decrease much), writing (selling) options on the stock to collect a premium…
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