Rivertree focuses on options trading with ETFs (exchange-traded funds) and the review of strategies that can potentially generate regular income with limited principal risk. For several years, interest rates have been at historical lows in the US. Current monetary policy1 suggests that interest rates are likely to remain low for the next few years. In this environment, income-generating options strategies may be useful to investors.
There are a number of options strategies that are typically considered to produce modest returns with limited risk. These income strategies attempt to increase cash flow and return principal. Options income strategies frequently involve “writing or selling” put and call options contracts. Selling options generates income from premiums. In addition, income may also result from the dividends and capital appreciation of underlying equities.