(sells) a call option on that same security to another investor.
Think of a buy-write fund like owning a house and renting out the spare room. buy write funds
In a market that often feels like a roller coaster, many investors are looking for a way to smooth out the ride. Enter —investment vehicles designed to generate consistent income by trading away a bit of their upside potential. If you've ever wanted to "rent out" your stocks for extra cash, this strategy is for you. What is a Buy-Write Strategy? (sells) a call option on that same security
In exchange for selling this option, the fund receives an immediate cash payment called a . This premium provides the "yield" that buy-write funds are famous for, often reaching double digits even when traditional dividends are low. How the Math Works (in Plain English) In exchange for selling this option, the fund