Core Insights - Options-based ETFs are gaining traction among income-seeking investors, highlighting the appeal of high yields [1] - Many novice investors are entering these investments without proper due diligence, which is crucial for understanding the underlying strategies [2] Group 1: ETF Strategies - A significant portion of options income ETFs are covered call funds, which may lead investors to overlook the benefits of put selling [2][5] - The Neuberger Berman Option Strategy ETF (NBOS) offers an actively managed put-write strategy that is comparable in complexity to covered call strategies [3] Group 2: Benefits of Put Selling - Put option sellers aim for the options to expire worthless, granting them premium income, which can act as a buffer during market downturns [4][6] - Selling puts can potentially allow investors to acquire underlying assets at a lower cost basis due to the premiums collected [6] Group 3: Market Versatility - Put selling, as facilitated by ETFs like NBOS, is considered more versatile than covered calls, particularly in flat markets [7] - Historically, put writing has shown a greater capacity for upside capture in bull markets compared to covered call strategies, allowing for less limitation on gains [7]

Core Insights - The rise in interest rates in 2022 has led income-seeking investors to increasingly adopt options-based strategies, particularly ETFs [1][2] Group 1: Options-Based Strategies - Options income ETFs provide uncorrelated income, making them less sensitive to Federal Reserve policies [2] - The majority of legacy and some newer ETFs in this category are covered call funds, which generate income by selling call options [2] Group 2: Neuberger Berman Option Strategy ETF (NBOS) - NBOS, which transitioned to an ETF in January 2024, operates as a putwrite fund, selling puts instead of calls [3] - For the 12 months ending October 20, NBOS gained 3.54%, while the largest legacy covered call ETF declined by 4.36% [3] - As of September 30, NBOS had a trailing 12-month distribution rate of 7.40% and is up 8.40% year-to-date [4] Group 3: Advantages of Putwrite Strategies - Putwrite strategies like NBOS may offer greater upside capture compared to covered call ETFs, allowing for potential appreciation without sacrificing future gains [6] - NBOS can provide downside protection comparable to or exceeding that of covered call ETFs, which is often a key selling point for those funds [6] - The behavioral finance aspect indicates that puts are generally more expensive than calls, allowing NBOS to generate higher income by selling premium options [7]