ETFs To Buy For 4th Quarter Covered Call Writing

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ETF TRADING RESEARCH
ETFs To Buy For The 4th Quarter
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• Hi, My name is Corey and Im with ETF Trading
  Research, today were reviewing our recently
  published article

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• ETFs To Buy For The 4th Quarter

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• The 3rd quarter was rough one for stocks. The
  SP 500 is down nearly 9 during the quarter.
  Whats more, the large cap index is down more
  than 11 from its all-time high.

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• And it fell below the critical technical support
  of the 200-day moving average. Dont forget, the
  200-day moving average is one of the most closely
  watched trends.

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• Many investors that dont pay any attention to
  other form of technical analysis still watch the
  200-day moving average. Its a line in the sand
  between bullish momentum and bearish momentum.

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• In short, if the SP 500 is above the 200-day
  these investors are willing to buy. But as soon
  as it falls below it, theyre selling stocks or
  at the very least theyre not buying.

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• Theres no doubt about it, stocks are facing some
  serious headwinds right now. Slowing economic
  growth in China and the impact of lower oil
  prices is having a negative impact on the global
  economy.

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• Weve seen many economists downgrade their
  projections for economic growth in the US and
  around the globe. This less optimistic view is
  showing up in earnings estimates for companies in
  the SP 500.

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• Nevertheless, were seeing some optimism for the
  SP 500. Goldman Sachs (GS) recently went on
  record projecting the SP 500 to finish the year
  at 2,000. Thats 6 higher than where the SP is
  today.

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• As we put the 3rd quarter in the rearview mirror,
  its time to focus on the future. Lets see if
  we can find some ETFs To Buy For The 4th Quarter!

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• How To Find ETFs To Buy For The 4th Quarter

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• You can use a covered call strategy with any
  stock or ETF. But some stocks and ETFs are
  better than others for this type of strategy.

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• You can find bigger option premiums from volatile
  stocks or ETFs. But you stand a bigger chance of
  your stock ending up above the strike price and
  having your stock or ETF called away.

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• I prefer more stable stocks or ETFs even though
  you wont collect as big of an option premium as
  youll see on more volatile investments.

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• Choosing The Right ETFs To Buy For The 4th Quarter

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• Two ETFs to consider for your covered call
  strategy are the Consumer Staples Select Sector
  SPDR ETF XLP and the Technology Select Sector
  SPDR ETF XLK.

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• I think both of these ETFs are good ones to own
  in the current market environment. Consumer
  staples are a traditional safe haven. It also
  pays a 2.65 dividend yield.

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• You should see some solid profit by holding this
  ETF and writing a covered call against this
  position. The Technology Select Sector SPDR ETF
  is another good choice for a covered call
  strategy.

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• XLK is dominated by large cap tech stocks that
  have become some of the steadiest performers. It
  pays a solid 1.93 dividend yield and youll find
  slightly better option premiums on XLK than you
  will with XLP.

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• Covered Call ETFs To Buy For The 4th Quarter

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• Some of you may not comfortable using options.
  Dont worry, Ive got a solution for you too
• There are ETFs that used a covered call strategy.

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• The ETF does all of the work for you. You just
  buy the ETF like any other ETF and all of the
  work is done inside the ETF.
• The most popular ETF that uses a covered call
  strategy is the PowerShares SP 500 BuyWrite
  Portfolio PBP.

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• It has a little over 300 million in assets under
  management. PBP tracks CBOE SP 500 BuyWrite
  Index. Its designed to give investors returns
  of a hypothetical covered call strategy on the
  SP 500 Index.

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• It does this by using a hypothetical portfolio
  consisting of a long position in the SP 500 and
  selling a succession of one-month, at- or
  slightly out-of-the-money SP 500 call options.

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• There a few other ETFs with slightly different
  covered call strategies. You can use an ETF
  screener to find them.

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