Youtor
JEPQ vs JEPI
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Who wins the battle for the best income ETF, JEPQ or JEPI? As a baseline, let’s briefly start with how they’re similar. Both of these are covered call ETFs. What’s a covered call ETF? In a nutshell, it buys stocks, then writes, or sells, call options on them. A call option gives the buyer the right to buy a stock at a set price. Of course, they’d only want to do that if the stock goes HIGHER than that price. So, if you’re SELLING those options, like these ETFs are, that means SOMEONE ELSE gets to benefit from the upside in the stocks if they go up a lot. So to recap, they buy stocks, then sell call options on them. That means you get A LITTLE of the upside potential, but then anything beyond that set price, which is called the strike price, you give up. And what do you get for giving up your upside potential? A big fat income check, and THAT is why people buy ETFs like JEPQ and JEPI. Right now JEPI is yielding 8.5% and JEPQ is yielding 10.78%. So does that mean JEPQ is better? No. It WILL almost always have a higher yield, but that higher yield comes with higher risk. You get SOME dividends from holding the stocks, but most of the income comes from selling the options. The more volatile the stocks are, and the more potential upside you’re giving up, the more income you’ll get from the options. That’s why JEPQ will normally have a higher yield, because it’s riskier. • FREE Discord: https://www.fundamentalsoffinance.com... • #fundamentalsoffinance #jepq #jepi • 00:00 What is a Covered Call ETF? • 00:55 JEPQ JEPI Comparison
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