An option is a contract: the right, but not the obligation, to buy or sell something at a set price by a set date. Two flavours. A call is the right to buy at a fixed price (you want it when prices rise). A put is the right to sell at a fixed price (you want it when prices fall, like insurance). Every option has a buyer who pays a premium and a seller who collects it and takes on the obligation.

The key insight: someone SELLS these

Most retail chatter is about buying options for a lottery-like payoff. The quieter, more durable trade is selling them — collecting the premium, month after month, in exchange for capping your gains or agreeing to catch a falling market. That's where "option income" comes from.

Covered calls: rent out your upside

If you own a stock and sell a call against it, you pocket a premium today. If the stock stays flat or drifts up a little, you keep the premium and the gains. If it rockets, your upside is capped — you sold that away. It's income bought with your best up-months. That's the engine inside funds like JEPI, QYLD and XYLD — the basket behind our Options Income strategy.

Put-writing: get paid to catch the market

The mirror image: hold cash and sell a put. You collect a premium for promising "if the market falls to here, I'll buy it". In calm markets you just keep the premium; in a crash the put is exercised and you take the fall, softened by the premium you banked. That's the CBOE PutWrite index, tracked by the fund behind our PutWrite Income strategy.

The parity trick — they're the same bet

Here's the elegant part: "own stock, sell a call" and "hold cash, sell a put" have almost identical payoffs. It's a centuries-old result called put-call parity. Both are really the same thing — selling volatility for premium — which is why we treat covered calls and put-writing as two different products, not two independent edges. Stacking both concentrates one bet; it doesn't double an advantage.

Why we use ETFs, not raw option trades

Trading individual options honestly is hard to backtest — real historical option chains and realistic (not mid-price) fills are needed, or the numbers are fiction. So both strategies get their option exposure through real listed funds with genuine total-return histories. The track records you see are those funds' actual audited backtests, not a simulated options P&L. The methodology spells out how we compute them.

The catch

Option-income is not free money. You are selling insurance: paid a steady premium, on the hook when the rare bad thing happens. Expect a smoother ride with less upside than a plain index, and know that a fund's headline "distribution yield" (often 10%+) is not its total return — some pay you partly out of your own capital. Judge these on total return and drawdown, like everything else here.

Educational material — not investment advice.