New ETF looks to tap hot market for zero-day options

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By Saqib Iqbal Ahmed NEW YORK (Reuters) - An exchange-traded fund (ETF) that started trading on Thursday offers investors a new way to participate in ...

STORY CONTINUES BELOW THESE SALTWIRE VIDEOSNEW YORK - An exchange-traded fund that started trading on Thursday offers investors a new way to participate in the hot market for short-dated equity options, a risky trading strategy that has enthralled markets over the last year.

Short-dated options contracts, with a day or less to expiry - dubbed 0DTE options - have grown popular with investors over the past year, often making up as much as half the daily trading volume in the options on major ETFs and indexes, including the S&P 500 and the Invesco QQQ ETF. One such ETF - the JPMorgan Equity Premium Income ETF - has grown its assets to about $29.5 billion from about $12.4 billion a year ago. Assets at another, the Global X Nasdaq 100 Covered Call ETF, have grown to $8.1 billion from $6.9 billion a year ago. "If there is one thing that investors are eager to receive, it is a steady stream of income, and we hope to provide just that," said Defiance ETFs' Chief Executive Officer Sylvia Jablonski.

 

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Zero-Day Options Boom Is Spilling Into $7.4 Trillion ETF MarketThis year’s hottest options trade has found its way into the $7.4 trillion ETF arena for the first time, in the latest push by the financial industry to tap booming demand for stock investments with an income stream.
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