Matthew Tuttle
CEO & CIO of Tuttle Capital Management, Publisher of Daily H.E.A.T.
Covered-call income ETFs like SPYI make investors pay twice: they take the full drawdown, then give away most of the recovery. Per @Signal8Ai, SPYI gained 1.1% in May while the S&P 500 ran 9.4%, surrendering 88% of the rebound after February's slide. Put credit spreads collect the premium without giving up upside when the bounce comes. x.comÂ
Covered-call income ETFs are a broken way to generate income because they cap upside while keeping full downside. After a drawdown, they give up the recovery exactly when a retiree needs it most. Put credit spreads generate the same premium with defined risk and upside intact, for the same yield with far better convexity. x.comÂ
SPY's current pullback looks brief because whale accumulation remains above the level associated with mid-term trend continuation. The reading is 87.74%; it fell below 80% before both recent major crashes. Barring a black-swan event or major unexpected fundamental shift, this decline looks closer to earlier minor corrections. The stock market still has significant upside, and fear-driven discounts remain opportunities. x.com x.comÂ
SPY's weakness after Monday's gap up has rewarded the bears who loaded up on puts into that rally. x.comÂ
The NEOS S&P 500 High Income ETF suits investors who want cash income over capital appreciation. $400,000 in it could generate about $4,200 a month in distributions, versus about $347 a month from the Vanguard S&P 500 ETF. Both may deliver a similar total return of around 12%, one through more income and the other through more price appreciation. Critics such as @Budgetdog_ note the payout comes from a covered-call strategy that caps upside and may partly return capital. x.com x.comÂ
Friday's extremely high volume in the S&P 500 suggests US large-cap stocks may be close to a bottom. The last bottom came last April during the tariff scare, at a reading of 3 on the charted indicator. This is a tentative technical read. x.comÂ
The S&P 500 is set up to rise because too many bears are shorting it right now, a crowded positioning that tends to resolve against them. x.comÂ
The new generation of covered-call income ETFs on the S&P 500 and Nasdaq 100 is preferable to traditional dividend funds like SCHD, serving as counterbalances built to underperform in bull markets and outperform in flat or down ones. Given a bullish long-term market outlook, plain S&P 500 or Nasdaq 100 funds should still outperform them over decades. x.com x.comÂ
US equities could see a bounce followed by a bigger slide, given the latest surge in yields. x.comÂ
The S&P 500 and Nasdaq 100 look set to hold up because options chains are pretty bullish through June. Bears and doomers are out in force, and anyone betting heavily on SPY, QQQ or Dow puts could get crushed. x.comÂ
SPYI, QQQI, JEPQ, JEPI and QDVO are tier-one income ETFs, pairing high yields with minimal NAV decay and solid records. NEOS' SPYI yields about 10-12% with very stable NAV, using a tax-efficient options strategy that keeps more upside than covered calls; QQQI applies it to the Nasdaq-100 for 13-15%. JPMorgan's JEPQ yields 8-10% via ELNs and JEPI 7-9% with a defensive tilt, while Amplify's QDVO yields 9-11% from growth stocks plus options income. x.com x.com x.com x.com x.com x.comÂ
JEPI and JEPQ carry a structural weakness: rigid, formulaic rules make them execute enormous option rolls at predictable times each month, a problem once funds reach tens of billions. @KrisAbdelmessih explains that covered call funds behave more like partial equity exposure, and that many still underperform appropriate lower-beta benchmarks over long periods because of execution friction and structural inefficiencies. x.com x.comÂ
