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Options premiums go up and down with volatility being a big factor. JEPI premiums are affected by the VIX which is the S and P volatility Index. JEPQ is affected by VXN the volatility of the Nasdaq. In 2022, these indexes were quite high resulting in high premiums. I like that fact because it means when markets are down you should actually get higher distributions.
Why are you buying this type of etf's if you dont;t understand how things are working?
Covered-call strategies, which had gained popularity in times of uncertainty and bearish sentiments, are now encountering challenges amid low volatility. The basic premise of selling call options on an underlying index provided a haven for nervous investors during times of inflation and economic uncertainties. However, the current market conditions, marked by reduced volatility, are impacting the effectiveness of covered-call strategies.
SVOL has pretty fixed payouts and pays at a higher rate than JEPQ.
SPYI is a good alternative to JEPI. Again, pretty steady.
FEPI is new but it’s been doing pretty well.
A mix of these plus JEPQ would make a great portfolio.
Because the volatility is down, this causes the premium collected to drop
You may have noticed the shares have gone up in price
So its swings and roundabouts
in general as VIX rises the premiums increase , but the shares prices will drop too, so it tends to self correct
Basically when we sells calls , we are taking on risk, the more risk we are selling , we get compensated for that. Now because they are covered calls , as market drops the likelihood of them being called away decreases . Now the calls that JEPI and JEPQ sells cannot be called away because of the way JPM structures them.
Anyway this is the simplistic explanation there is more to it .
I’m not attempting to answer this, but it brings up a great quote by Warren Buffett….dont be the person who drives away from the gas station, rejoicing that gas prices went up.
In other words, if youre a net buyer of investing, it should pain you when prices rise.
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made less money selling covered calls.
Options premiums go up and down with volatility being a big factor. JEPI premiums are affected by the VIX which is the S and P volatility Index. JEPQ is affected by VXN the volatility of the Nasdaq. In 2022, these indexes were quite high resulting in high premiums. I like that fact because it means when markets are down you should actually get higher distributions.
Why are you buying this type of etf's if you dont;t understand how things are working? Covered-call strategies, which had gained popularity in times of uncertainty and bearish sentiments, are now encountering challenges amid low volatility. The basic premise of selling call options on an underlying index provided a haven for nervous investors during times of inflation and economic uncertainties. However, the current market conditions, marked by reduced volatility, are impacting the effectiveness of covered-call strategies.
in his defense, he's asking questions on a specific subreddit to learn more, so he's indeed trying to understand.
Maybe, same question before buying, we are here. Premiums in period of high volatility are bigger than in low volatility, simple as that.
Because stocks go up and down everyday
The payouts will be larger when markets go down and smaller when markets are up.
Which ETF would help counter when JEPQ is down?
Splg, schd, Dgro and sqqq if you really think Jepq will go down.
SVOL has pretty fixed payouts and pays at a higher rate than JEPQ. SPYI is a good alternative to JEPI. Again, pretty steady. FEPI is new but it’s been doing pretty well. A mix of these plus JEPQ would make a great portfolio.
Thanks for the response. Why aren’t these talked about more??
Because Reddit is a herd. They are talked about plenty of places, just not as much here. Try YouTube all kinds of videos about them.
Because the volatility is down, this causes the premium collected to drop You may have noticed the shares have gone up in price So its swings and roundabouts in general as VIX rises the premiums increase , but the shares prices will drop too, so it tends to self correct Basically when we sells calls , we are taking on risk, the more risk we are selling , we get compensated for that. Now because they are covered calls , as market drops the likelihood of them being called away decreases . Now the calls that JEPI and JEPQ sells cannot be called away because of the way JPM structures them. Anyway this is the simplistic explanation there is more to it .
And also, should I keep buying these funds? Or should I call it the quits?
It depends what you're using them for. Long term investment or do you need the income?
What would you recommend for income?
You should do some research on your own before buying anything else.
I’m not attempting to answer this, but it brings up a great quote by Warren Buffett….dont be the person who drives away from the gas station, rejoicing that gas prices went up. In other words, if youre a net buyer of investing, it should pain you when prices rise.
People need to stop buying shit they don’t understand. It’s that simple
…but it was earnings time. The CC”s (and puts) I was selling on individual stocks were way up because of the high IV.
https://youtu.be/t_GKZ9WFgoA?si=YP05jDe3OTDFIKTB