Back to top

Image: Bigstock

Zero-Day Options ETFs: A New Way to Generate Income

Read MoreHide Full Article

  • (1:30) - What Should Investors Expect Heading Into The Fourth Quarter?
  • (6:50) - What Are Zero Day Options And How Are They Used?
  • (11:00) - What Are The Concerns With The Surge In Zero Day Stock Options Trading?
  • (14:30) - Defiance Nasdaq 100 Enhanced Options Income ETF and S&P 500 Enhanced Option Income ETF: QQQY & JEPY
  • (18:40) - Defiance Pure Electric Vehicle ETF: EVXX
  • (26:00) - Episode Roundup: Podcast@Zacks.com

 

In this episode of ETF Spotlight, I speak with Sylvia Jablonski, CEO and CIO at Defiance ETFs, about the broader market and some interesting new ETFs.

Stocks recently experienced their worst month and first negative quarter of 2023, as the possibility of interest rates remaining higher for a longer duration weighed on investor sentiment. Where should investors allocate their cash in the fourth quarter, historically the strongest period?

Sylvia believes that the market may remain volatile in the short term but sees significant opportunities for long-term investing. She still favors big tech and semiconductor stocks, including Apple (AAPL - Free Report) , Microsoft (MSFT - Free Report) and Nvidia (NVDA - Free Report) , which have become more attractively valued after the recent dip.

Zero-day options (0DTE) trading volumes have recently surged, accounting for approximately half of all S&P 500 index option trading, according to FT. Defiance has recently introduced two actively managed funds that employ these options as a yield generation strategy.

The Defiance Nasdaq 100 Enhanced Options Income ETF (QQQY - Free Report) aims to generate outsized yields for investors while providing exposure to the Nasdaq-100 (QQQ - Free Report) by selling options on a daily basis.

Its sister fund, the Defiance S&P 500 Enhanced Options Income ETF (JEPY - Free Report) , utilizes a similar strategy but offers equity exposure to the S&P 500 index (SPY - Free Report) .

Both ETFs also hold Treasury bonds that serve as collateral against the options, and come with an expense ratio of 0.99% each.

The Defiance Pure Electric Vehicle ETF offers equally weighted exposure to the five largest electric vehicle manufacturers, with Tesla (TSLA - Free Report) as the top holding in the fund.

Tune in to the podcast to learn more.

Make sure to be on the lookout for the next edition of the ETF Spotlight and remember to subscribe! If you have any comments or questions, please email podcast@zacks.com.

 

Published in