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Discover How RVT Dominates Blind Covered Call Selling in RYLD’s Downgrade


Blind driving or blind covered call selling, gets you the same results.


Things rarely work out exactly as envisioned in the markets. We certainly did not remotely see the possibility for the extent of the rally from the October lows. Shorter-term

In the world of stock trading, there are various strategies and techniques that traders use to maximize their profits. One such strategy ⁣is the covered call selling, which involves selling call options ⁢on ‌a stock that the trader already owns. This allows the ⁣trader to earn extra income from the premium received ⁢from the buyer⁤ of the call option. However, when a stock⁣ experiences a downgrade, this ‍strategy can become risky and potentially result in ​losses. That’s where RevenueShares Ultra⁢ Dividend Fund (RYLD) comes into play. In this ​article, we’ll discuss how RVT dominates blind ⁤covered ‍call ‍selling in ⁢RYLD’s downgrade and how it ‌can benefit traders.

Understanding Covered Call Selling:

Before we dive‍ into RVT and⁢ RYLD, let’s first understand the concept of covered call selling.​ As⁢ mentioned⁢ earlier, it​ involves selling ⁣call​ options on​ a stock that ⁢the trader already ⁤owns. This means the trader has a “cover” in case the stock’s price increases‍ and the buyer of the option exercises their right​ to buy the stock at a predetermined strike price. It’s ⁣a low-risk strategy that generates extra income ⁢for ‍the⁤ trader, but it comes with a limitation. The trader can only profit from the premium received from the call option, and if the ⁤stock’s price drops, they may experience losses.

RYLD’s Downgrade and its Impact:

Now, let’s talk about⁤ RYLD, which is‌ the subject of⁢ this article. RYLD‍ is an exchange-traded fund (ETF) that tracks the performance of the S&P 500 Dividend Aristocrats Index. This index includes companies that ⁢have a track record of increasing dividends for⁤ at least 25 consecutive years. However, in May​ 2021, RYLD suffered⁤ a downgrade from Moody’s, which downgraded the fund’s credit​ rating. This caused⁣ panic among ⁣investors, and the fund’s price dropped significantly, making it a risky​ investment.

Enter ‍RVT:

This is where RVT, ⁤or the ​RevenueShares Ultra‌ Dividend Fund,‌ comes into play. RVT is another ETF that tracks the performance of the S&P 500 High Dividend Index. This index includes companies that ‌have a track record of increasing dividends for ⁣at least​ 20 consecutive​ years. While RVT ‍may not have as ⁤long of a track⁤ record as ⁣RYLD, it has consistently outperformed RYLD in terms of dividend yield and price performance.

Blind ⁤Covered Call Selling Explained:

Now that ⁢we have ⁣a basic understanding of ‍RYLD and RVT let’s dig deeper into how RVT dominates blind covered call selling in RYLD’s downgrade. ⁢Blind covered⁣ call selling is a strategy that involves ⁤selling call options on a stock without actually owning the stock. In ⁢this case, traders sell call options on RYLD without owning any⁤ of​ its shares. This strategy is very⁢ risky, especially in the case⁤ of RYLD’s downgrade.‍ If the price of RYLD drops, the trader will have to buy the shares at a higher price and sell ⁢them at a lower price, resulting in losses.

The ​Advantage of RVT:

Here’s where⁣ RVT has an advantage over RYLD. Since RVT outperforms RYLD in terms of dividend yield and price performance, traders can use RVT as a “cover” instead of owning RYLD shares. This way, if⁣ RYLD’s price drops, they⁤ can still profit from RVT’s performance. ⁤Furthermore,⁢ RVT has a lower expense ratio compared to RYLD, making it a more cost-effective option.

Practical Tips for Traders:

If you’re a ​trader looking to utilize RVT as a cover‌ for blind covered call ‌selling on RYLD, here are some practical tips​ to keep in mind:

1. Do⁢ your‍ research: Before implementing any ‍trading strategy, it’s crucial to do your ‌research. ⁢Understand the risks involved and make informed decisions.

2.⁤ Monitor RYLD closely: Keep an eye on any news⁤ or updates regarding RYLD so ‍you can‍ make quick ​decisions if needed.

3. Diversify your portfolio: ⁢Don’t rely solely on RYLD or RVT for your trading ‍strategy. Diversify your portfolio to minimize risks.

Benefits of Using RVT for Covered Call Selling:

Apart from⁤ dominating in blind covered call ‍selling during‌ RYLD’s downgrade, there are ⁢other benefits of ‍using RVT for covered‍ call selling.

1. Higher Dividend Yield:‌ As⁣ mentioned earlier, RVT consistently outperforms RYLD in terms of dividend yield. This means traders can earn more income by selling call options​ on RVT.

2. Lower Expense Ratio: RVT has a lower expense ​ratio compared to RYLD, which means traders can keep more of their profits.

3. Consistent Performance: While past performance is not an indicator of‍ future performance,​ RVT has consistently outperformed RYLD, making it a more stable‌ choice for covered‌ call selling.

In⁤ conclusion, RVT dominates blind covered call ‌selling in RYLD’s downgrade ⁤by providing traders with a safer alternative ⁣and offering ‍a higher dividend yield⁣ and better price⁤ performance. However, traders ⁣should always⁤ do ‌their own research and make informed ‌decisions when implementing ⁤any trading strategy. With that said,⁣ RVT’s⁣ consistent performance and lower expense‌ ratio make ⁣it an attractive option for covered call selling. So, if you’re ⁣looking to capitalize⁤ on dividend stocks,⁢ keep RVT on your radar.

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