Options Income via ETFs (Covered-Call ETFs)
US core
An equally-weighted, monthly-refreshed basket of covered-call / option-income ETFs (JEPI, JEPQ, QYLD, XYLD, RYLD, DIVO) — options exposure via real, total-return funds, not a fabricated option backtest. Covered calls trade upside for income: expect a smoother ride but less upside than a stock index. A fund's headline yield is not its total return, and no edge over holding the underlying is claimed. These funds use derivatives and may count as complex products at your broker (appropriateness test).
This strategy's universe (6) →
Worst stretch in the backtest: -17.3% — a simulated $1,000 would have dipped to ~$826 before recovering.
Backtest window: 2020-09-30 → 2026-09-30 · as of 2026-09-30 (updated quarterly)
This window does not include the COVID crash (Feb–Mar 2020) and the 2008 financial crisis.
Full methodology & limitations
Track records are simulated backtests, not live results. Methodology and current limitations: (1) Universe membership is real point-in-time index constituents - Nasdaq-100 (US) and WIG20 (PL), with dated add/drop history - so backtests see each index as it actually was, with no survivorship from later additions. Prices are adjusted close (total-return). When the backtest runs on the licensed, delisted-capable feed (EODHD), index members that later delisted or renamed are still priced and INCLUDED, closing the survivorship gap on the price side; when it runs on the keyless fallback feed, some delisted names are unpriced and dropped, which can flatter drawdowns. Smaller residuals remain: index changes after the last sourced revision are not yet reflected (Nasdaq-100 membership as pulled on 2026-06-30, WIG20 as of its September 2025 revision), and a few long-delisted tickers may still be unresolved. A name with no real quote for 14 days is treated as untradable - never picked and never held on a frozen price - and a renamed listing is held under its new code with its full history. (2) Costs are charged per market on each rebalance's turnover - 5 bps for US names, 10 bps for EU, 20 bps for Warsaw (GPW) - the conservative end of typical half-spread-plus-fees for liquid names; market impact and FX conversion are not modelled (negligible at retail size, understated for large money). (3) Prices are total-return (dividends reinvested) where the data feed supports it. (4) Sharpe and Sortino use a flat 3%/yr cash (risk-free) rate, approximately the average US T-bill yield over the backtest window; actual cash rates varied 0-5% within it and Polish rates were mostly higher, so ratios are approximate. (5) Cross-market calendar gaps are bridged by carrying the last known price forward, which can modestly understate day-to-day volatility. (6) Rebalances are simulated at the same closing price the signal is computed from (close-to-close execution); a live follower trades at the next session's prices, so simulated results may differ from what next-bar execution would have produced. Past simulated performance does not predict future results.
Hover any metric above — I'll explain what it means.
How you'd carry it out in your broker
Every model portfolio update publishes as a plain list of tickers and weights — the exact same file for every subscriber. Here's the general shape of loading that into four popular brokers; the actual tickers and weights only appear once you unlock this strategy.
This strategy has averaged 0.0 changes in the model portfolio per month, over its last publications.
XTB, Trading 212, IBKR, Revolut
XTB
- Each published ticker is searchable in the XTB app/web platform.
- XTB has no basket/pie import — each ticker's published weight is its share of the model portfolio; whether and how much to trade is your own decision.
Trading 212
- Portfolio → Pies → Create Pie.
- Each published ticker goes in with its published weight % — the Pie then tracks that allocation for you.
Interactive Brokers (IBKR)
- Once unlocked, the model portfolio downloads as a CSV.
- Classic TWS: File → Import Watchlist reads that file — each ticker's published weight is its share of the model portfolio.
Revolut
- Each published ticker is searchable in the Invest tab.
- Revolut has no basket import — each ticker's published weight is its share of the model portfolio; whether and how much to trade is your own decision.
General information about loading a published, identical-for-everyone list into a broker — not a personal recommendation. Whether and how much to trade is your own decision, in your own account; we never trade on your behalf.
Track record
Chart data (year by year)
| Year | Simulated return |
|---|---|
| 2020 (from Sep) | +9.2% |
| 2021 | +19.3% |
| 2022 | -11.1% |
| 2023 | +14.2% |
| 2024 | +17.1% |
| 2025 | +10.6% |
| 2026 | +9.3% (to 2026-09-30) |
Dashed line = Buy & hold SPY (same window and costs): CAGR 16.3%, max drawdown -24.5%.
Simulated backtest — methodology & limitations above, next to the stats.
This month's model portfolio
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How it works — in plain words
It spreads money equally across a basket of covered-call / 'option-income' ETFs (JEPI, JEPQ, QYLD, XYLD, RYLD, DIVO) and re-levels them to equal weight once a month. Each of those funds owns stocks AND writes call options against them — it rents out the upside for cash today. That option premium is where the fat monthly distributions come from. This is how you get 'options' exposure on the site: through real funds with a genuine track record, not a made-up option backtest.
A covered call in one picture. Say a fund owns an index at 100 and writes a call letting someone buy it at 103 next month, pocketing $2 today. Three ways it can end: the index drifts to 101 — the fund keeps the $1 gain AND the $2, a happy +3. It rockets to 115 — the fund is capped near 103 and collected $2, so about +5 while a plain index holder made +15 (it left ten dollars on the table). It falls to 90 — the $2 softens the blow to −8 instead of −10. See the pattern? You trade the big up months away for steady income and a thinner cushion on the way down.
Writing a covered call is the same trade as being short a call option, which is really 'short volatility': you get paid a premium now to give away the jackpot months later. Over a full cycle that can smooth the ride and can even improve return-per-unit-of-risk a little (the CBOE buy-write research) — but it caps the upside, so in a roaring bull market it lags a plain index badly. The trap to internalise: a fund's headline 'distribution yield' of 10-12% is NOT its total return. Some covered-call funds pay you partly out of their own share price, so the yield looks huge while the NAV quietly shrinks. Always judge one on TOTAL return, not the payout sticker.
Cautionary classic: QYLD (Nasdaq-100 covered calls) has paid a ~12% distribution for years, yet its share price has drifted DOWN over its life — much of that 'yield' was return of your own capital. Headline yield and total return are different animals.
Live since 2026-07-21 through 2026-11-06: -1.8% (3 mo) — the result of the published portfolios, entering at the next session's close. This is not a backtest.
Update history
| As of | What changed |
|---|---|
| 2026-11-01 | Model update: no material change this month |
| 2026-10-01 | Model update: no material change this month |
| 2026-09-03 | Model update: no material change this month |
| 2026-08-03 | Model update: no material change this month |
| 2026-07-21 | Initial model portfolio published (6 position(s)) |
Grounded in published research
The peer-reviewed findings this strategy is built on:
- Whaley, R. (2002). Return and Risk of CBOE Buy Write Monthly Index. Journal of Derivatives, 10(2). (the buy-write / covered-call return and risk profile: comparable return to the index at lower volatility, with upside capped)
- Israelov, R. & Nielsen, L. (2015). Covered Calls Uncovered. Financial Analysts Journal, 71(6). (the decomposition — a covered call is mostly equity beta plus a modest short-volatility premium; the risk-adjusted improvement is real but small, and it sells away the upside)
- Israelov, R. (2019). Adding Alpha by Subtracting Beta. (the caveat: mechanical covered-call selling mistimes volatility and is not a free income machine — headline distribution yield is not total return)
A documented, peer-reviewed effect — cited so you can read the source yourself, not take our word for it. Implementation and results are ours (see methodology); the underlying finding is the literature's.
Understand this strategy
Plain-language explainers behind the mechanics above.
- What are options — calls and puts explained
- The Black-Scholes model, explained simply
- Option Greeks: delta, gamma, theta, vega, rho
- The volatility smile (and skew), explained
- Charm and the charm surface (a second-order Greek)
- Net premium flows and dealer gamma, explained
- The wheel strategy, explained (and its listed ETF version)
This strategy's rules and every model-portfolio update are written and run by HedgeYourOwn's founder.