An Analysis of the Effectiveness of Index ETFS and Index Derivatives in Covered Call Strategy

Abstract

One of the most efficient methods of managing risk and creating extra income is the covered call technique. Holding the underlying asset while writing a call option on it constitutes the approach. If properly implemented, the method can be a useful instrument for generating money. The efficiency of using Nifty 50 Index ETFs and Index derivatives as the legs of a covered call strategy is examined in the study. The plan would aid in producing a steady cash flow in the portfolio, generating wealth. The paper back-tests the covered call strategy with the primary goal of determining the technique's viability. The study's findings could be used to find a powerful instrument for wealth generation.