So far 2025 has been a challenging year for investors. Thehe S&P 500(Snpindex: ^gspc) and Nasdaq Composite(Nasdaqindex: ^ixic) have reduced 3.5% and 8.7%, respectively, as the current writing as concerns about the current and promised tariffs of the Trump administration, sticky inflation and increased interest rates have brought many investors from macroeconomically sensitive shares.
In this type of market, it is tempting to simply park your money in a high -profile savings account, a deposit certificate (CD) or some treasures in the US and call it a year. This would be a prudent move, but there are still some simple ways to generate more profits, even if you expect the market to trade away in the foreseeable future.
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One popular way to profit in a stagnant market is to invest in a stock-traded fund (ETF), which consistently writes covered calls to pay higher yields. Here’s a look at a popular one – JPMORGAN NASDAQ Own Capital Premium Income ETF(Nasdaq: Jepq) – To see why this may be just the smartest investment you can make today.
When you sell a covered call, you agree to sell an action that you own if it exceeds a certain price (the price of the strike) at a specific date (expiration date). The person who buys this call pays you a premium, but you are obliged to sell the strike on the strike if it is traded above that price when the option expires. If it is still traded below the price of the expiration date, you will keep both the shares and the premium with the leakage of the option.
Called calls will limit your bull market profits as the main stocks are likely to be called when they rise. But they can also cause fire on a bear market if you keep your lost shares too long to win these small bonuses.
Therefore, the side road market is usually a Goldilocks environment for covered conversations. If your shares continue to trade in a narrow and predictable range, you can repeatedly write covered calls to get some extra income.
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You can repeatedly write covered calls on your own shares to generate additional income every week or every month, but it is a time-consuming process that can make you sell some of your most promising shares prematurely. It will also not work unless you have already invested enough money in the main position, as you have to keep 100 shares per share to write a coverage. Finally, the covered calls are usually not effective taxes, as each sale is taxed as an independent trade.
JPMORGAN NASDAQ Equity Premium Recky ETF addresses all these problems with ordinary ETF, which contains 108 shares. It grossly reflects Nasdaq-100farms and its best positions include Apple., Nvidia., Microsoftand AmazonS
It charges a relatively low net cost of 0.35% and increases its monthly dividends by selling calls to NASDAQ-100 each month. ETF pays a 12-month dividend yield of 10.4%. Instead of writing individual covered calls, ETF uses capital notes (ELN) that attaches to these options but can be traded with a more efficient rate.
Therefore, this ETF must be stable and continue to pay high dividends as long as the NASDAQ-100 does not collect significantly over the next few months. This would certainly lower than the NASDAQ-100 if it jumps higher, but will continue to pay much higher yield than most fixed income investments.
JPMorgan Nasdaq Equity Premium Income ETF is probably not the perfect long -term investment, as covered calls will drop during Raging Bull Markets. But if you are looking for a reliable 10% profitability on the side market, it can be a brilliant investment.
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John Maki, former CEO of Whole Foods Market, a subsidiary of Amazon, is a member of the Board of Directors of Motley Fool. JPMorgan Chase is an advertising partner of Motley Fool Money. Leo Sun has positions in Amazon, Apple and JPMorgan Nasdaq Equity Premium income ETF. Motley Fool has positions and recommends Amazon, Apple, JPMorgan Chase, Microsoft and NVIDIA. Motley Fool recommends the following options: Long January 2026. $ 395 Microsoft calls and short January 2026 $ 405 Microsoft calls. Motley Fool has a policy of disclosure.
Is this a highly accessible ETF the smartest investment you can make today? Originally published by Motley Fool
