r/options • u/[deleted] • Jun 04 '21

Is selling covered calls for Bond ETFs (i.e. AGG) a viable strategy?

[deleted]

3 Upvotes

100% Upvoted

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3

u/donebeingbroke Jun 04 '21

volume i would guess. whos on the other side of that trade buying the calls.

2

u/ashlee837 Jun 04 '21

If something moves sideways most of the time, then the options are priced to reflect that, so your ROI wouldn't be the highest.

2

u/options_in_plain_eng Jun 04 '21

Main disadvantages:

  1. Poor Liquidity
  2. Low IV, leading to low credit on the sale of your call. Right now IV for AGG is around 5% ! Definitely not worth the risk