Q: I知 considering whether I should invest in TLT, HPYT, or a combination of both. I understand that HPYT has a much higher yield, but I知 struggling to fully understand why. TLT, which makes up around 70% of HPYT痴 holdings, only has a yield of about 4.3%, which makes me wonder how HPYT can achieve such a significantly higher yield. I understand the basics of covered call ETFs, but what kind of options are they trading to generate this yield? There seems to be something I知 missing here幼ould you also explain the additional risks that come with HPYT's elevated yield?
5i Research Answer:
HPYT writes covered call options on its portfolio, for up to 100% of its securities. The call...