ETF - Index
IWM
iShares Russell 2000 ETF
Generate higher income from IWM (Russell 2000) with covered calls and cash secured puts. More volatile than SPY for better premium.
Monthly Premium1.5-2.5%
Annualized Return18-30%
Stock Price$220-240
IV RankModerate (35-55)
Options LiquidityVery Good
Dividend Yield1.2%
Why IWM for Covered Calls & Cash Secured Puts?
IWM offers significantly higher premium than SPY due to small-cap volatility. More affordable than SPY (~$22K for 100 shares). Good for diversified exposure with enhanced income.
Example Covered Call Trade
IWMCovered Call
Strike Price$240 (5% OTM)
Expiration30 days
Premium$4.00 per share
Return If Flat1.7% ($400)
Return If Called6.6% ($1,520)
Keep Probability68% keep shares
Recommended Strategy for IWM
Sell calls 4-6% OTM to capture the higher premium. IWM is great for the wheel when you're bullish on small caps but want income while waiting.
Risks to Consider
- Higher volatility than large-cap ETFs
- Small caps underperform in risk-off environments
- Economic sensitivity
- Interest rate sensitivity
Analyze IWM Covered Calls Now
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