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Bearish Covered Calls on Short ETFs | PowerOptions Web Log
The financial talking heads and pundits have been saying for some time now that the stock market is destined to take another nosedive in the near future. Time will tell whether their short-term predictions are correct or not, but the stock market is cyclical, so there will always be ups and downs, which causes problems for investors using the covered call investing strategy. One of the most common complaints against the covered call investing strategy is the exposure when stock markets make severe downward movements. However, investors can circumvent the problems with covered calls in a bear market by entering covered calls against short and ultra short Exchange Traded Funds (ETFs). Sign up now for PowerOptions 14-day free trial Inverse or short ETFs are traded on exchanges like stocks and are designed to perform opposite or inverse to the long version of the ETF. Short ETFs operate by selling stocks...