/biz/ - Business & Finance

>>55705675
>They sell synthetic calls and options on individual stocks and distribute the premiums
You know I've never understood why these ETFs exist. I can see why leveraged ETFs exist those are cool because you still have leverage but not the theta decay of long options, but how do covered call/synthetic cover call etfs keep their price from getting obliterated long-term? At least when you run traditional covered calls you can bag hold until the stock recovers but if you're continuously selling calls you're going to lock in any losses as your short call will cap any recovery made by the underlying. I suppose a short put strategy would be slightly better but if you're continuously selling puts you're still going to piss away capital if the stock goes on a long-term decline.