Pacer Trendpilot US Bond ETF (PTBD) Covered Call Strategy

See how much cash income you could generate by selling covered calls on Pacer Trendpilot US Bond ETF (PTBD)

💰 Cash Income Analysis 🛡 Downside Protection 📈 Profit Potential

Pacer Trendpilot US Bond ETF (PTBD) $19.00 1000 shares · 10 contracts

What do the tables below mean?

The results shown below are potential covered call positions on the stock that you entered. The conservative, neutral, and aggressive strategies are based on the different strike prices for the covered call opportunities. The exact strike prices for these positions and further interpretation of the strategy can be obtained by email. Simply provide your information below:

If you are neutral on Pacer Trendpilot US Bond ETF (PTBD)

When you decide to trade this stock as a covered call, you could receive a $350 premium just for making it available, no matter what happens to the stock. But if the stock were to rise, you could make a profit of $-1,645. This trade will also get you more than 11% worth of downside protection for your stock.

Cash Generated

$350

Potential Profit

$-1,645

Downside Protection

11%

The covered call strategy can be used as a reasonable hedge for lower volatility securities. The hedge exists as the premium that is received to lower the cost basis / break-even point of your holdings... but you are only hedged by that amount. It is a great means to generate income on your holdings and act as a 2nd dividend or 2nd income on the shares in your account.

Regarding the Money on the Table Report... The sell-to-open call enters you into an obligation to potentially deliver your shares of stock at the sold call strike price. If you wanted to hold the position long term and not worry about rolling or adjusting the call too often, you would likely just stay with Out of the Money (above the current underlying price) looking for a lower probability of assignment. This would mean a lower premium and thus a lower hedge.

The Conservative approach means you would be selling a call In the Money to begin with, below the current price. This gives a higher premium due to the intrinsic value and time value of the option premium. However, if you do not want to have your shares assigned you would need to roll the call up to a higher strike price and further out in time. This might cost a higher premium than you initially received.

The covered call strategy is a popular and potentially valuable instrument for shares of stock that you own. Note: The most efficient hedge against an optionable stock or ETF in your account is the Married Put strategy.

What Is a Covered Call Strategy?

A covered call is an options income strategy where an investor who owns shares of a stock sells (writes) call options against those shares. The premium received from selling the call option generates immediate cash income, regardless of what happens to the stock price.

How Does a PTBD Covered Call Work?

If you own 1000 shares of PTBD, you can sell 10 call option contracts (each contract represents 100 shares). You collect the option premium immediately. In return, you agree to sell your shares at the strike price if the stock rises above it before expiration.

Three Approaches to Covered Calls

Aggressive (Out-of-the-Money): Higher potential profit if the stock rises, but less downside protection from the smaller premium collected.
Neutral (At-the-Money): Balanced approach with the highest time premium, offering good income and moderate protection.
Conservative (In-the-Money): Maximum downside protection from the large premium, but you agree to sell shares below the current price.

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