cmisoptions

ETF Spreads Widen Substantially from a Year Ago

Why are you buying the shares as the entry trade, better to setup a bull put spread on the ETF (most of these have listed equity options), give yourself enough room for a 10% market decline before you buy. With the VIX at these levels, the yield on spread income, is so great that after 12 months of income, your position could be paid for by market vol. Yes the spreads are large, these apply to the options as well. The tighter the ETF Spread, the tighter the option spreads. Stay with the thick ETFs, there are enough of them now. We do this work for RIA/IA firms as sub advisors via multiple platforms. The hedge will give you protection as well in these uncertain markets.