QYLD: Buy The Fear As Volatility Returns

(8min)

Summary

  • I am upgrading Global X NASDAQ 100 Covered Call ETF to 'Buy' due to my anticipation of the return of market volatility.
  • Higher volatility can boost option premiums for QYLD but tends to dampen the return potential of equity.
  • My assessment is geared toward the near term only, and I suggest investors only use the Fund as a tactical tool.
  • Long-term return is ultimately driven by growth, and QYLD's option overlay puts a cap on the return from growth.
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Man And Woman Looking Down At Market Volatility

DNY59

QYLD ETF: previous thesis and new developments

The last analysis I published on the Global X NASDAQ 100 Covered Call ETF (NASDAQ:QYLD) rated the ETF as a Hold. That analysis was published back in September 2024

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This article was written by

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Sensor Unlimited is an economist by training with a PhD, with a focus on financial economics. She is a quantitative modeler and for the past decade she has been covering the mortgage market, commercial market, and the banking industry. She writes about asset allocation and ETFs, particularly those related to the overall market, bonds, banking and financial sectors, and housing markets.

Sensor Unlimited contributes to the investing group Envision Early Retirement which is led by Sensor Unlimited. They offer proven solutions to generate both high income and high growth with isolated risks through dynamic asset allocation. Features include: two model portfolios - one for short-term survival/withdrawal and one for aggressive long-term growth, direct access via chat to discuss ideas, monthly updates on all holdings, tax discussions, and ticker critiques by request. Learn More.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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