Descriptions
The term buy-write is used because the investor 'buys' stocks and 'writes' call options against the stock position. The writing of the call option provides extra income for an investor who is willing to forego some upside potential.
The BXD Index is designed to show the hypothetical performance of a strategy in which an investor buys a portfolio of the 30 stocks in the DJIA, and also sells (or writes) covered call options on the DJIA Index.
Read more about this topic: CBOE DJIA Buy Write Index
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