Bronxville, N.Y.-based Recon Capital Advisors unveiled a covered-call ETF dubbed the Recon Capital Nasdaq 100 Covered Call ETF (QYLD) in mid-December. The ETN tracks the CBOE Nasdaq-100 BuyWrite Index. It costs 0.60 percent per year.
A covered call is an options strategy whereby an investor holds a long position in an asset and sells or “writes” call options on that same asset. The goal is to generate more income, through the sale of call options, than the asset would otherwise provide on its own from dividends or other distributions.
Essentially, QYLD will hold the Nasdaq-100’s basket of stocks while selling one-month call options on the index.