North American Financial 15 Split Corp T.FFN

Question - Covered Call EFTs

[amugsgame]

I respect the opinions of the posters here (well most anyway). Any thoughts / experience on Covered Call EFTs?. Some seem to offer a fairly good yield - although that always makes me think What's the downside?"

[amugsgame]

Oops - sorry "ETFs"

[mouserman]

Covered calls are an option play, and when exercised you have to have the stock on hand to sell. But you make money on premium you sold it for and then can buy/add to another holding in the fund that you deem a bargain. However these are only as good as the person/professional  playing the options. There is more to it than just setting a covered call option at the price today, as you would

[mouserman]

maybe this explains it better "A covered call is constructed by holding a long position in a stock and then selling (writing) call options on that same asset, representing the same size as the underlying long position. A covered call will limit the investor's potential upside profit and may not offer much protection if the stock price drops." "Can you lose money on

[Bigalex]

If you refering to the BMO Z sries (zwu, zwb, zwc) the  risk is with highly volatile market where their covered call ( shares) would be bought and slow down profits.  That's the only reason i'm buying preferred shares now instead of covered call etf , and the tield is higher with ffn/FTN.pr.  :)

[Dumpinvestor]

Downside is potentially limit upside profit...you should do google search. Recently, I did invest 40%-50% of my portfolio in cover call etf for monthly income