After delivering 0.75% in rate cuts in late 2025, the Fed appears to be on pause for the next few months, with Fed funds futures markets only pricing in the next move inI ventured into investing in high school in 2011, mainly in REITs, preferred stocks, and high-yield bonds, starting a fascination with markets and the economy that has not faded despite the years. More recently I have been combining long stock positions with covered calls and cash secured puts. I approach investing purely from a fundamental ...

Core Viewpoint - The article discusses an income-focused investment strategy for JPMorgan Chase & Co., emphasizing the benefits and drawbacks of selling covered calls against long stock positions while also considering the attractiveness of preferred stocks [1]. Group 1: Investment Strategy - The investment approach combines long stock positions with covered calls and cash secured puts, reflecting a fundamental long-term perspective on investing [1]. - The author has a background in investing since high school, with initial interests in REITs, preferred stocks, and high-yield bonds, indicating a diverse investment experience [1]. Group 2: Coverage Focus - The company primarily covers REITs and financials, with occasional insights on ETFs and other stocks influenced by macroeconomic trade ideas [1].

Core Viewpoint - YieldMax COIN Option Income Strategy ETF (CONY) has been disappointing for many investors due to its strategy of writing covered calls against Coinbase Global, Inc. (COIN) [1] Group 1 - The ETF targets high yields but has faced challenges in delivering consistent returns to investors [1] - The strategy involves using options to generate income, which may not align with all investors' expectations [1]

Core Insights - The article discusses the challenges faced by traders with smaller accounts when using popular options strategies like covered calls and naked puts, primarily due to the risk of assignment and capital requirements [1][4]. Group 1: Challenges for Small Accounts - Smaller accounts may struggle with the capital-intensive nature of strategies like covered calls and naked puts, which require the obligation to buy or secure 100 shares of stock [4]. - The automatic nature of assignment when selling puts poses a significant risk for traders without sufficient capital [3]. Group 2: Alternative Strategies - Risk-defined credit spreads are recommended as a solution for small accounts to tap into income-generating strategies without massive capital requirements [2][5]. - Credit spreads allow traders to benefit from high implied volatility environments while defining their risk upfront and dramatically lowering capital requirements [5]. Group 3: Recommended Spreads - The article highlights two core credit spreads suitable for beginners: the Bear Call Spread, which is used when expecting the stock to stay below a certain level [6]. - This strategy involves selling a call option at a strike price aligned with expected price resistance and buying another call at a higher strike with the same expiration [6].

Core Insights - Closed-end funds (CEFs) are currently seen as undervalued investment opportunities, often trading at discounts to their net asset values (NAVs), making them attractive for contrarian investors [2][3] High Yield CEFs: Eaton Vance Tax-Advantaged Dividend Income Fund (EVT) - EVT invests in both common and preferred stocks, focusing on qualified dividends that are taxed at favorable long-term capital gains rates [4] - The fund currently yields 8%, significantly higher than the typical 2% yield of standard dividend funds, partly due to a leverage of about 20% of assets [6][7] - EVT trades at an 8% discount to NAV, wider than its historical average of 5% [9] High Yield CEFs: Eaton Vance Tax-Managed Buy-Write Opportunities (ETV) - ETV employs a covered call strategy, holding a portfolio of 150 large-cap stocks and generating income through selling covered calls on major market indexes [11] - The fund trades at approximately 94 cents on the dollar, providing a cost-effective way to gain exposure to its monthly distributions [12] High Yield CEFs: BlackRock Enhanced Global Dividend Trust (BOE) - BOE has a diversified portfolio of about 50 stocks, split between U.S. and international equities, focusing on blue-chip companies [13][15] - The fund yields over 8%, supported by a covered call strategy, and currently trades at an 8.7% discount to NAV, which is less than its long-term average of 11% [16] High Yield CEFs: BlackRock Resources & Commodities Strategy Trust (BCX) - BCX invests in stocks of commodity and natural resources companies, maintaining a portfolio of 45 companies across energy and materials sectors [17] - The fund is currently available at a 6% discount, which is less attractive compared to its long-term average discount of 10% [18] High Yield CEFs: ClearBridge Energy Midstream Opportunity Fund (EMO) - EMO focuses on midstream energy companies, yielding nearly 10% and utilizing high leverage of about 30% to enhance returns [19][21] - The fund has outperformed its benchmark, the Alerian MLP Index, since 2023, but trades at a premium compared to its historical average discount of 15% [23]

Group 1 - The article discusses the author's investment journey, starting in high school in 2011, focusing on REITs, preferred stocks, and high-yield bonds, indicating a long-standing interest in markets and the economy [1] - The author has recently adopted a strategy that combines long stock positions with covered calls and cash secured puts, emphasizing a fundamental long-term investment approach [1] - The author primarily covers REITs and financials on Seeking Alpha, with occasional articles on ETFs and other stocks influenced by macro trade ideas [1]

Core Insights - The article discusses the implications of persistently low volatility, particularly as measured by the CBOE Volatility Index (VIX), on options trading strategies and market behavior [3][4][10] - It highlights that low volatility can lead to inflated expectations for options strategies, especially covered call ETFs, and suggests that a rise in VIX could be beneficial for options sellers [4][10] Volatility and Market Behavior - Low volatility typically correlates with stable or rising stock prices, while high volatility is often associated with market declines [3] - The VIX has remained low over the past three years but is susceptible to sudden spikes, which can disrupt options strategies [2][5] Options Trading Strategies - The article emphasizes the challenges faced by options sellers in a low VIX environment, where the compensation for taking on risk is diminished [4][8] - It discusses the use of covered calls and collars as strategies to manage risk, but notes that the current low VIX results in minimal returns for these strategies [6][9] Market Indicators - The article suggests that volatility may be nearing a bottom, as indicated by technical analysis tools like the Percentage Price Oscillator (PPO) [4][5] - It warns that volatility often spikes without warning, making it crucial for traders to anticipate these movements [5] Conclusion - The article concludes that options sellers may benefit from a rise in VIX, as higher volatility would lead to better compensation for risk [10]

Group 1 - The article discusses the author's journey into investing, starting in high school in 2011, focusing on REITs, preferred stocks, and high-yield bonds, indicating a long-standing interest in markets and the economy [1] - The author has recently adopted a strategy that combines long stock positions with covered calls and cash secured puts, emphasizing a fundamental long-term investment approach [1] - The author primarily covers REITs and financials on Seeking Alpha, with occasional articles on ETFs and other stocks influenced by macro trade ideas [1]

Group 1 - The article discusses the author's journey into investing, starting in high school in 2011, focusing on REITs, preferred stocks, and high-yield bonds, indicating a long-standing interest in markets and the economy [1] - The author has recently adopted a strategy that combines long stock positions with covered calls and cash secured puts, emphasizing a fundamental long-term investment approach [1] - The author primarily covers REITs and financials on Seeking Alpha, with occasional articles on ETFs and other stocks influenced by macro trade ideas [1]

Group 1 - The article discusses the author's journey into investing, starting in high school in 2011, focusing on REITs, preferred stocks, and high-yield bonds, indicating a long-standing interest in markets and the economy [1] - The author has recently combined long stock positions with covered calls and cash secured puts, emphasizing a fundamental long-term investment approach [1] - The author primarily covers REITs and financials on Seeking Alpha, with occasional articles on ETFs and other stocks influenced by macro trade ideas [1]