Defiance ETFs has launched an actively managed “zero day to expiry” (0DTE) ETF on the New York Stock Exchange. The Defiance S&P 500 Enhanced Option Income ETF (JEPY ) uses daily options to augment income on the S&P 500.
JEPY aims to achieve consistent and outsized monthly yield distributions coupled with equity market exposure to the S&P 500. The fund looks to generate outsized monthly distributions by selling option premiums on a daily basis. It uses daily options to realize rapid time decay by selling in-the-money puts with 0DTE.
Retail investors have become increasingly interested in the 0DTE market. Some estimate that retail investors make up about 5% of the volume in contracts tied to the S&P 500 that expire within 24 hours. But Cboe Global Markets senior derivatives analyst Jonathan Zaionz told Bloomberg that this figure may be as high as 40%.
Defiance launched JEPY to offer investors more liquid and transparent access to this strategy.
The company’s CEO Sylvia Jablonski said in a statement that JEPY is “offering investors a new paradigm for income generation.”
“JEPY has the potential to reshape S&P 500 options income strategies within the ETF landscape,” she added.
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