Covered Call US Banks ETF

ZWK-T

Buying back covered calls to resell. Will often do that, when stock declines. If there's enough time value, he would wait. Time value drops quickly when close to expiry.

He doesn't like the US banks this late in the cycle as the yield curve inverts. Banks are making less money and will face increasing challenges.

He likes it. He knows how BMO runs the covered call desk and he likes it. He likes US Banks. He would hold.

The US banks benefited from the looser regulatory environment of the Trump's administration. If you think that the US banks are to move higher you are better off just owning the banks directly. 3-5 years out he prefers the banks directly.

What is interesting is that this starts trading tomorrow. He likes the structure of BMO covered calls as they don't overlay the calls too tight to the strike price. In a low rate environment, this is a good way to boost FI yield. MER: 0.65%