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BMO Covered Call DJIA Hedged to CAD ETF (TSX: ZWA)

Generating income from covered calls

This ETF tracks the Dow Jones Industrial Average (hedged to Canadian dollars) and uses covered call options to generate additional income. The options are written out of the money, which means the stock is trading below the potential sale price (the strike price). The option premium provides limited downside protection. The underlying portfolio is rebalanced to maintain better representation of the broad market, and options are rolled forward upon expiry.


Income Investor

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Interactive Performance Chart

ZWA was first recommended here on April 21, 2018