How to use Buy Write Strategy by a simple click

As I have said many times, I have a dual personality in investment. I hold a core portfolio with quality dividend paying stocks for long-term and I’m also very active in short-term trading, especially trading for income when opportunities arise. There are many different ways of doing short-term trading for income, but one approach is among the safest frequently used by traders. It is called covered calls or buy write strategy. Simply put, we use call options to agree to sell someone your underlying stocks at a higher price and in return you get paid upfront for the promise. Why it is so safe? Well, since you have already held the stocks and you are only agreeing to sell if the price goes up from the current level. If the share price does not go up in the predefined timeframe, you still keep your shares and also the money the other side has already paid you. And you can do this repeatedly as long as you still hold the stocks. Isn’t it great?! But I assume probably the majority of people don’t know much about options and won’t be able to do so. Don’t worry. Here is the good news that you can effectively apply this strategy by one simple click: you can buy the ETF, PBP, that tracks the S&P 500 BuyWrite IndexTM using this income strategy. Because it is an income trading strategy, it generates cash routinely and therefore you get paid with a higher dividend yield, currently around 5%! Now in terms of its safety, two records can demonstrate: its beta is only 0.54, which means its volatility level is 46% less than the S&P fluctuations. And if you compare the BuyWrite index with S&P for long-term since 1980s, it has substantially outperformed the market by a wide margin as shown below. In other words, buying this ETF will likely make you more money over time than simply buying stocks!