Opinions Larry Berman CFA, CMT, CTA
BMO US Put Write ETFZPW.TOCOMMENTJan 25, 2021
Larry Berman CFA, CMT, CTAUnknown
$15.15
Stock price when the opinion was issued
E.T.F.'s
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COMMENT
DON'T BUY
Similar to a covered call, but it's the flipside. So it's the sell side. Most people don't understand how puts work, and with the put write you're getting a very complicated strategy. He'd recommend something more conservative, such as covered calls because they're a lot easier to understand.
E.T.F.'s
COMMENT
He was a big fan of these put-write strategies--to write puts on the best companies on the market--when they launched, but they have since failed to execute this plan. He still holds these for the yields, though, because it provides an alternative source of yield. In a recession, it depends on how fast the markets go down. There is an embedded protection in these ETFs, giving you only half the downside. With these, you place a put, but don't own the companies, but rather harvest the yield off the option premium.
E.T.F.'s
COMMENT
WEAK BUY
How to play the market defensively. The put-write strategy did perform better in the last couple of months. ZWU-T is a high dividend payer in the utilities. It has pipelines in it so as pipeline expansion has been crushed, this has weighted a lot on the sector. Otherwise he likes utilities here.
E.T.F.'s
ZPH and ZPW way to extract yield from the market without taking a lot of risk. They have been okay but not great. ZPAY is a better way to benefit from the same strategy.