This was a very good explanation of the difference in mind set between a growth (traditional) investor and an income investor. The holy grail of investing is total return … you can get there more than one way and you did a nice job of explaining the difference.
Even though WDTE uses a bullish strategy, because they collect more premiums it will outperform SPYT in a selloff by a point or two. SPYT, on the other hand will outperform WDTE in big up markets as it is uncapped to the upside with the call spread vs WDTE which is limited to the intrinsic and extrinsic premium collected. So a fun combination would be buying WDTE into strength and then using the dividends to buy WDTE in weakness and capitalize on the rebound in markets while collecting dividends the whole time.
I agree. These strategies perform differently in different market conditions, and some market conditions make 1 more favorable over the other. I agree that buying these assets, it is as if you are placing these trades that the assets do.
@@theworkinginvestor I realized I accidentally said buy WDTE in both strength and weakness. I meant to say but WDTE into strength and but SPYT into weakness.
Very interesting idea. I will note in your example that the width of your call credit spread was quite wide. I think the better example might be with a narrower spread but then again I’m uncertain of how Defiance prefers to set up their spreads
my experience, They are not equal paying div's and nav declines in both. There needs to be another way. msty seems to be the only YM winner that hasn't a depreciated nav. I think its 3 x weekly with the dte's, and 1 monthly MSTY, flip, rinse and repeat. ULTY changes to its prospectus Oct 16 may change its dismal nav stability.
I just created synthetic shor to my BITO position. Unfortunatelly other high yield ETFs has very poor option chain and short time so it would not pay in the end I think..I mean the synthetic short would be so costy that your dividents would poorly cover it..
This was a very good explanation of the difference in mind set between a growth (traditional) investor and an income investor.
The holy grail of investing is total return … you can get there more than one way and you did a nice job of explaining the difference.
you have a very astute mindset-video demonstration is appreciated !
Thank you for your kind words. I'm glad you found value in it.
Good one sir!
Ty!
Even though WDTE uses a bullish strategy, because they collect more premiums it will outperform SPYT in a selloff by a point or two. SPYT, on the other hand will outperform WDTE in big up markets as it is uncapped to the upside with the call spread vs WDTE which is limited to the intrinsic and extrinsic premium collected. So a fun combination would be buying WDTE into strength and then using the dividends to buy WDTE in weakness and capitalize on the rebound in markets while collecting dividends the whole time.
I agree. These strategies perform differently in different market conditions, and some market conditions make 1 more favorable over the other. I agree that buying these assets, it is as if you are placing these trades that the assets do.
@@theworkinginvestor I realized I accidentally said buy WDTE in both strength and weakness. I meant to say but WDTE into strength and but SPYT into weakness.
@@thehoopscoopI caught on and realized what you implied.
Very interesting idea. I will note in your example that the width of your call credit spread was quite wide. I think the better example might be with a narrower spread but then again I’m uncertain of how Defiance prefers to set up their spreads
Per the holdings of spyt from 9/24 trades, I see a spread on spxw 5745 and 5760.
my experience, They are not equal paying div's and nav declines in both. There needs to be another way. msty seems to be the only YM winner that hasn't a depreciated nav. I think its 3 x weekly with the dte's, and 1 monthly MSTY, flip, rinse and repeat. ULTY changes to its prospectus Oct 16 may change its dismal nav stability.
I just created synthetic shor to my BITO position. Unfortunatelly other high yield ETFs has very poor option chain and short time so it would not pay in the end I think..I mean the synthetic short would be so costy that your dividents would poorly cover it..
You are right. The liquidity is not the best as of yet on the options based etf funds. As more people trade them, it may pick up.