I trade actively (futures/options) and have different accounts for different reasons (i.e: long term/IRA/401K/day trading/swing trading/YOLO account as well) so my financial literature is relatively well, but I still dont see the biggest risks to yield max ETF, which is selling covered calls and selling cash secured puts on many famous stocks such as TSLA/NVDA
Those have good return, so I have been buying IRA, since taxes wont apply until withdrawal in retirement.
I understand how they will pay out the dividend in theory and actually I use similar strategy in SPY but whats the biggest risk here?
My best guess is that individual stocks goes to 0, by which Yield Max ETF will go into 0, but it's hard to imagine that NVDA will go to 0 in any time soon, since they are dealing with big tech or big name stocks with good financial statement and pretty much too big to fail business (i.e: DIS/JPM)
That makes me think there is virtually no risks but apparently, it sounds too good to be true, and I am getting cautious. Are there anything I should know on this kind of ETFs?
Thank you
Submitted July 13, 2024 at 01:44AM by tionstempta https://ift.tt/cxjHw9X
