(FTQI) First Trust Nasdaq - Ratings and Ratios

The First Trust Nasdaq BuyWrite Income ETF, listed on the NASDAQ under the ticker symbol FTQI, is designed to generate income for its investors through a unique investment strategy. This strategy involves investing primarily in equity securities that are listed on U.S. exchanges, providing a foundation of diversified stock holdings. To enhance returns, the fund employs an option strategy, specifically focusing on writing, or selling, U.S. exchange-traded call options on the Nasdaq-100 Index. This approach allows the fund to capitalize on the premiums received from selling these call options, potentially increasing the overall yield of the investment.

The call options written by the fund are characterized by having expirations of less than one year. This relatively short-term focus allows the fund managers to actively manage the options portfolio, responding to market conditions and adjusting the strategy as needed to optimize returns. Furthermore, these call options are typically written at-the-money or out-of-the-money, meaning their strike prices are either equal to or higher than the current market price of the underlying Nasdaq-100 Index. This strategy can help in managing risk while aiming to generate consistent income through the collection of option premiums. With its ISIN identified as US33738R4074, the fund is classified as an ETF, falling under the derivative income category, reflecting its use of options to achieve its investment objectives.

By combining a portfolio of U.S. equities with an options writing strategy, the First Trust Nasdaq BuyWrite Income ETF offers investors a distinct approach to income generation. This method can provide a regular stream of income from the premiums of the call options, potentially reducing the reliance on dividend-paying stocks or traditional fixed-income securities. The fund's structure as an ETF provides the added benefits of transparency, liquidity, and diversification, making it an attractive option for investors seeking to incorporate a buy-write income strategy into their portfolios. The ETF category of derivative income highlights the fund's innovative approach to income investing, utilizing derivatives to enhance yield in a managed portfolio.