Economy

GreatGazoo

(4,043 posts)

10. You make a good point and the rule in investing is the same as the rule

Mon Jan 27, 2025, 02:50 PM

Monday

in gambling: Never place a bet that you don't understand.

But covered calls are not as complicated as they may appear. The part I am loose on is the "return of capital" tax advantage and that I suppose is a question for me to take up with a tax consultant.

Covered calls are a way to own stocks (or in this case an index fund; collection of major stocks) and rent them out for income.

https://www.investopedia.com/articles/optioninvestor/08/covered-call.asp#toc-how-a-covered-call-works

QYLD held up like a champ today during the DeepSeek panic, moving less than half as much as the underlying index.

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Retirees -- Opinions? Experiences? Is 14% Div Too Good To Be True? [View all] GreatGazoo Jan 26 OP

No experience with these, but I agree it sounds too good. surfered Jan 26 #1

It's an ETF. bucolic_frolic Jan 26 #2

They have the same covered call set up with a S&P index ETF GreatGazoo Jan 26 #3

Check the 10 year and one year chart bucolic_frolic Jan 26 #4

The Fed paused rate cuts and missed an expected cut GreatGazoo Jan 26 #6

That was quite a buying opportunity. /nt bucolic_frolic Jan 26 #7

You get paid for taking risks. Short term treasuries marybourg Jan 26 #5

That's around the range I'm getting on bonds Mike 03 Monday #8

If you're willing to take the on the risk of complex securities you may not marybourg Monday #9

You make a good point and the rule in investing is the same as the rule GreatGazoo Monday #10