Horizons Financial Select Sector Covered Call ETF (NYSEArca: HSPX)
30-day SEC yield: 1.44%
Comment: Speaking of covered calls, the Horizons S&P 500 Covered Call ETF is one of the leaders in that ETF space. In sideways, bear or even modest bull markets, covered call ETFs such as HSPX can work in investors’ favor. By utilizing a covered call strategy, an investor who owns a stock sells call options, and collects the income from the premiums paid by the buyer of the option. Specifically, the underlying index utilizes an “out-of-the-money” covered call strategy.
HSPX has a sector equivalent in the form of the Horizons Financial Select Sector Covered Call ETF (NYSEArca: HFIN), which also pays a monthly dividend. [Two ETFs for a Market Pullback]