Covered-Call Income With Daily Options: Inside ProShares ISPY, IQQQ, ITWO
Simeon Hyman breaks down ProShares’ daily covered-call ETFs, volatility-adjusted strikes, index tracking, distributions, and potential return-of-capital tax treatment.
At the Future Proof conference, ProShares’ Global Investment Strategist Simeon Hyman joined ETF.com’s Dave Nadig to unpack a new twist on covered-call investing. ProShares’ ETFs — ISPY, IQQQ, and ITWO — use a daily call-writing strategy rather than the traditional monthly approach.
“In a monthly strategy, if the index goes up early, you’re done for 27 days,” Hyman explained. “Ours resets daily, so you’re always back in the game.”
The funds also feature volatility-adjusted strikes, writing further out-of-the-money when volatility spikes to help maintain equity participation. The result, Hyman said, is “the income people want from covered-call strategies — and the equity returns at the same time.”
Index-based and rules-driven, the suite even offers potential return-of-capital tax benefits, adding another layer of investor appeal.
