FTHI 📈 First Trust BuyWrite Income - Overview

The First Trust BuyWrite Income ETF (NASDAQ:FTHI) aims to generate income by investing in a diversified portfolio of U.S. equity securities listed on major exchanges, such as the New York Stock Exchange (NYSE) and the NASDAQ. This ETF focuses on established companies with a strong market presence, providing a solid foundation for potential long-term growth.

In addition to its equity holdings, the fund employs an option strategy to enhance returns. It writes (sells) call options on the Standard & Poor's 500 Index, which is a widely followed benchmark of the U.S. stock market. This approach allows the ETF to generate premium income from the sale of these options, which can help to offset potential losses or enhance returns in a stable market environment.

The call options written by the fund are structured as a laddered portfolio, meaning they have staggered expiration dates of less than one year. This approach helps to manage risk and provides a regular stream of income as options expire and are replaced. The options are written at-the-money or slightly out-of-the-money, which means they are priced close to the current market value of the underlying index or slightly above it. This strategy is designed to balance potential upside with income generation.

As a U.S.-domiciled fund, the First Trust BuyWrite Income ETF is subject to the regulatory framework and investor protections of the United States. For more information, investors can visit the fund's website at http://www.ftportfolios.com/.