passion7272 @passion7272: "Let's talk about $JEPI and..."

Bangladesh

Edited

Let's talk about $JEPI (Jpmorgan Equity Premium Inco) and $JEPQ (Jpm Nasdaq Equity Premium) - Part 1 of 10 of these two dividend powerhouses - In this part, I will explain how and when these two funds make money. JEPI and JEPQ primarily generate returns through two mechanisms: stock appreciation and option premiums. 1. Stock Appreciation: Like traditional equity funds, JEPI and JEPQ invest in stocks that have the potential for long-term growth. JEPI focuses on large-cap U.S. stocks of $SPX500 (SPX500 Index (Non Expiry)) while JEPQ is more tech-focused, tracking the $NSDQ100. As stock prices increase over time, the value of these funds grows. 2. Covered Call Income: The key differentiator of JEPI and JEPQ is their use of a covered call strategy. This involves selling call options on a portion of their holdings, allowing them to collect premium income. The premiums act as an additional revenue stream, boosting the yield for investors. However, this strategy also limits the upside potential since the fund may be required to sell stocks if their prices rise above the call option strike price. ***When They Make More or Less Money*** JEPI and JEPQ generate income regardless of market conditions, by their option-selling strategy. However, they perform best in moderately volatile markets where stocks experience steady movement without extreme surges. During bull markets, their covered call strategy may cap gains, while in bearish conditions, the premium income can help offset losses. This means they earn in both ways!!!! When the market is bullish, they earn less from option selling, resulting in lower dividends. However, when the market is bearish, they earn more from option premiums, leading to higher dividends. In the coming parts, I will delve into these two ETFs and also compare them with the most popular dividend ETF, $SCHD (Schwab US Dividend Equity ETF) and the most popular dividend stock, $O (Realty Income Corp) $SVOL (Simplify Volatility Premium) $MAIN (Main Street Capital Corp.) $VICI (VICI Properties Inc) $VZ (Verizon) $T (AT&T Inc)