Carter Braxton Worth, Founder and CEO of Worth Charting, joined Keith Black, Managing Director of RIA Channel, to discuss the technical analysis behind the Worth Charting Options Income ETF (WRTH).
Worth describes the ETF as a systematic premium income strategy built on selling options, collecting premiums, and benefiting from time decay. The fund seeks to deliver stock market-like returns with bond market-like volatility (11% to 14% returns).
WRTH applies technical analysis to select options. Worth explains that the strategy sells far out-of-the-money calls and puts, also known as strangles, on large-cap, non-biotech stocks after major earnings-driven price gaps of 10% or more. After a significant earnings-driven move, stocks often enter a short-term period of consolidation. The ETF seeks to capitalize on this behavior by selling calls well above and puts well below the prevailing stock price, then collecting premiums as the options decay and expire. The strategy seeks to avoid earnings risk by initiating positions after earnings reports.
The portfolio typically holds 35 to 50 equally weighted positions. The strategy may also sell strangles on aggregates, such as gold, oil, or equity indices, although Worth notes that these positions are used less frequently.
WEBCAST – Worth Charting Options Income ETF (WRTH)
Join Worth for a discussion on an equity income strategy driven by technical analysis. The Worth Charting Options Income ETF (WRTH) sells short-term, out-of-the-money options, collecting premium and benefitting from time decay.
This webinar will cover:
- Why a systematic approach to selling short-term, out-of-the-money options is efficacious, and when done with certain key risk-mitigating overlays is particularly successful.
Accepted for 1 CFP / IWI / CFA CE Credit
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