The "Stuck Market" Points to Opportunity of Using “Covered Multipliers” for Income and Risk-Management

The stock market looks now more like a stagnant market. The broad market indexes fell into trading ranges and threaten to convert into the bear market. The same applies to many individual stocks and industries. Covered call ETFs are growing in popularity among fixed income investors. The covered call writing strategy is very popular. ETFs that use them will multiply like mushrooms in the forest after a good summer rain.

One of them, the JPMorgan Equity Premium Income ETF (JEPI), has everyone's attention. How to reduce the risk of significant losses when holding covered call ETFs? There are several possibilities. One option is to own an out-of-the-money put options on an index ETF that closely matches the makeup of your stock portfolio with a covered call ETF. However, options are not suitable for everyone, and a second option might be an ETF designed specifically for this purpose. There are now over 200 ETFs that use options to protect and/or increase returns, and one of their brightest and most acclaimed example is exactly JEPI.