ALPS Files For High Volatility Fund
(DENVER) According to SEC registration documents, ALPS is planning to debut a volatility ETF that will give investors access to an intrguing options trading strategy.
The U.S. Equity High Volatility Put Write Index Fund (HVPW) will seek to track the NYSE Arca U.S. Equity High Volatility Put Write Index, and will charge a 0.95% expense fee. The underlying index will track a hypothetical portfolio consisting of put options which have been sold on each of 20 large cap stocks deemed to have the highest volatility. The put options will have 60-day terms and by selling the options the fund will receive premiums from buyers, which will increase in value if the option are not exercised and expire worthless. Additionally, the fund’s cash component will be invested in 3-month Treasury bills. If optimism continues to build on Wall Street, this ETF may profit big time as high volatility stocks can clinch impressive gains during bull markets.
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