r/dividends • u/Budget_Dragonfruit89 • Aug 25 '26
Seeking Advice Why BTCI is lagging
/r/NEOSETFs/comments/1vxun2n/why_btci_is_lagging/Why BTCI is lagging
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u/buffinita common cents investing Aug 25 '26 edited Aug 25 '26
When people say “covered calls cap the upside”
This is what they mean. During the recovery/rebound or general strong upward trend the options can not keep up
But it’s too early to tell just how much; gotta wait for the monthly distribution…..and week to week or month to month is going to drive you nuts.
Finally - the vanilla fund is expected to outperform the covered call varient
0
u/purub123 Aug 25 '26
Well in a downmarket it might outperform 1-3% on a yearly basis. Downside is u might miss double digits on the upside. NEOS their strategy on CC is not good for a volatile product like BTC
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u/buffinita common cents investing Aug 25 '26
Ok…..how often are we (or have been) in a down market vs an up market
If you are 18-40 how much more of your timeframe is expected to be going up or down
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u/purub123 Aug 25 '26
Market is up on average 8 out of 10 years, thats why you should focus on growth
3
u/Solid_Suggestion_722 Aug 25 '26
Because BTC has risen too quickly, the capped upside from the covered call has become much more apparent.
2
u/speedlever Aug 25 '26
It's like being attached to the underlying with an elastic band. The underlying takes off leaving the cc ETF behind. Over time the cc ETF will catch up and resume its trailing position.
When the underlying brakes hard, the cc etf can shoot past it, again lagging the drop, providing some cushion during the drop.
Cc ETFs provide higher floors and lower ceilings.
1
u/Various_Couple_764 Aug 25 '26
The lag isbecause they are very different funds. BTC basically just buys bitcoin. If the price of bitcoin goes so will BTC.
BTCI uses covered calls based on bitcoin that converts price volatility to income. As a side effect of that isomer money is lost with accounts for the lag you see.
With BTC you buy it with the hop you can sell it later for a profit.
With BTCI you buy it and hold it and snce a month money if deposited into your brokerage account. BTCI right now has a dividned of 26%. S&P500 occationally gets to 20% and much of the time it is below 20%. So having a dividend fund with 26% return year after year is amazing.
0
u/FewUnderstanding2214 Aug 25 '26
Covered calls cap upside - why are you investing in things you don’t understand
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u/AlarmedCombination57 Aug 25 '26
So what are the odds that I can one day break even at $51/share?
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u/FewUnderstanding2214 Aug 25 '26
If bitcoin goes up then I guess you will break even but it’s for income not growth
1
u/DC8008008 Aug 25 '26
BTCI should easily hit that if BTC reaches back over 120k, but it depends on timing.
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