Coming back to this one while researching some NEOS funds. It doesn't look like it's really performing as intended, at least according to Seeking Alpha total return data. A regular short term treasury ETF like SGOV or BIL has just about the same total return, year to date. I don't think I'd take the tail risk of a put spread in exchange for a 1% best-case return with no opportunity for higher upside due to the underlying being short term treasuries.
There are also floating rate ETFs like FLOT and FLRN that have distribution yields over 5%. FLRT is a floating rate ETF that has a distribution yield over 8%.
Like the idea but let's remember there is a cost here too so let's round to maybe a extra 1%? Still want the most for my cash so it's a good add for the extra 100 k in my ira not invested
I'm skeptical about this fund for a few reasons. One of them is the specifics of the put spread strategy. By my math, a 10% OTM strike is around 1 delta. It's worth very little, so to make any money at all, the spread would need to be very wide. For example: If I sold such a spread today (14 DTE, ~10% OTM) with the goal of making $10 in premium, my max loss would be $2990. A 299-to-1 risk-to-reward ratio! This is a perfect illustration of "picking up pennies in front of a steamroller." If we were to have another 2020-style crash, I think it would be catastrophic (and possibly fatal) for this fund.
I've always liked that saying "picking up pennies in front of a steamroller." Looks like the highest short strike they have at the moment is 4080 which is about 7.5% OTM. That would pair with a 3955 long leg and currently has about $5200 in potential profit. Max loss ~1.7 mil or about 0.7% of the fund but doubt it would ever get there prior to them closing the trade. Not catastrophic but it could eat up your t-bill income for the year quickly.
Sorry, I must still be missing something regarding their position sizing... He said that they use 100% of the notional value of the purchased T-Bills as collateral for the put spreads, and that they use 100% of the fund inflows to purchase the T-Bills. Doesn't that mean that the value of their T-Bill portfolio is equal to the collateral needed for the put spreads, so that at any given time, the entire fund is at risk of an extreme tail event?
Hi Dave, I can do that myself. I keep my money on cash in Fidelity and then collect 5%. Then I will do more than 10% out of money selling puts. That's a no-brainer. 😊
in general you are right, but keep in mind you have to open/roll these spreads weekly and also have to pay option fees. Sometimes it's worth to pay small fee and don't deal with this yourself.
How well does CSHI do in Bear market vs a Bull Market? Since it is rules based, it should have been back-tested in both Bull & Bear markets. Also, what is Max Draw Down?
They are negative in their first year, year to date. Yikes. My rollover IRA is at Fidelity and all I do is sell premium plus I’m making just about 5% on the cash set aside to cover short out and call obligations. Cones out to about $2400 a month just in interest! Woohoo like double dipping.
I just dont get CSHI....its supposde to yield 1 to 1 1/2 OVER Tbills but this thing is BARELY n I mean barely!!! beating SGOV so where is all this option premium or credit spreads they sell going???!?!!
@user-jo2iq6so7d well, give it one year, and you'll see it will give back half of that 10%, so it becomes just like the 5% you can get from the Fidelity money market.
@@TobySchnoodle Yes for the last 2 months, however all the other 10 months had no ROC. What matters is overtime, some months short and some over. Agreed the short term trend is not good.
The past few months especially. HIGH usually rallies back after the distribution drop leading up to the next one but it has not been doing that recently.
I just ran the numbers for this on market beat dividend calculator Starting with 100 shares , it would take 5 years with drip and an annual contribution of 1200 to reach 200 shares and an annual dividend of a meager $290. This s*** is so not worth it. At the end of 5 years. Your new total balance would be $13100. This company is a joke 😂
This is not a beat the market etf. It's a beat your cash money market account fund .Park the cash in this fund until you deploy it to the market beating etf du jour of your choice
![Lp. Сердце Вселенной #60 РОЖДЕНИЕ ЛОЛОЛОШКИ [Финал] • Майнкрафт](http://i.ytimg.com/vi/YoR0pAV9FVQ/mqdefault.jpg)
Coming back to this one while researching some NEOS funds. It doesn't look like it's really performing as intended, at least according to Seeking Alpha total return data. A regular short term treasury ETF like SGOV or BIL has just about the same total return, year to date.
I don't think I'd take the tail risk of a put spread in exchange for a 1% best-case return with no opportunity for higher upside due to the underlying being short term treasuries.
Yes. I think there are better options for your $$$'s.
There are also floating rate ETFs like FLOT and FLRN that have distribution yields over 5%. FLRT is a floating rate ETF that has a distribution yield over 8%.
Nice! I will check them out.
I found this a while ago and invested. Great addition to my income portfolio
Nice! I like the concept.
Like the idea but let's remember there is a cost here too so let's round to maybe a extra 1%? Still want the most for my cash so it's a good add for the extra 100 k in my ira not invested
I'm skeptical about this fund for a few reasons. One of them is the specifics of the put spread strategy. By my math, a 10% OTM strike is around 1 delta. It's worth very little, so to make any money at all, the spread would need to be very wide. For example: If I sold such a spread today (14 DTE, ~10% OTM) with the goal of making $10 in premium, my max loss would be $2990. A 299-to-1 risk-to-reward ratio! This is a perfect illustration of "picking up pennies in front of a steamroller." If we were to have another 2020-style crash, I think it would be catastrophic (and possibly fatal) for this fund.
did you watch entire video? He is hedging that option play, of course it will lose some, but it won't be catastrophic as you said...
I've always liked that saying "picking up pennies in front of a steamroller." Looks like the highest short strike they have at the moment is 4080 which is about 7.5% OTM. That would pair with a 3955 long leg and currently has about $5200 in potential profit. Max loss ~1.7 mil or about 0.7% of the fund but doubt it would ever get there prior to them closing the trade. Not catastrophic but it could eat up your t-bill income for the year quickly.
Sorry, I must still be missing something regarding their position sizing... He said that they use 100% of the notional value of the purchased T-Bills as collateral for the put spreads, and that they use 100% of the fund inflows to purchase the T-Bills. Doesn't that mean that the value of their T-Bill portfolio is equal to the collateral needed for the put spreads, so that at any given time, the entire fund is at risk of an extreme tail event?
@@misha27418 Let me follow up and get an accurate answer.
@@wealthadventures Thanks, Dave, I really appreciate it! I'm interested in understanding how the strategy works.
Zero risk in the Fidelity money market account making 5%. Not taking the risk holding cash just for another 2%. I do have SPYI though.
I suppose if money market rates drop, the 2% may start looking more attractive.
Hi Dave, I can do that myself. I keep my money on cash in Fidelity and then collect 5%. Then I will do more than 10% out of money selling puts. That's a no-brainer. 😊
in general you are right, but keep in mind you have to open/roll these spreads weekly and also have to pay option fees. Sometimes it's worth to pay small fee and don't deal with this yourself.
@nikolaygannev4294 You are right, Dave. But,, like that guy in The Heat said, "For me, the action is the juice..."
@@nikolaygannev4294 ua-cam.com/video/qZfEnU9-6gc/v-deo.htmlsi=kCfsUriAj-HOvI6c
Certainly can go for it yourself... but you know that!
How well does CSHI do in Bear market vs a Bull Market? Since it is rules based, it should have been back-tested in both Bull & Bear markets. Also, what is Max Draw Down?
Hi. CSHI is t-bills plus an option put spread strategy. Really not much to back test in this case.
You ask good questions
Thanks!
USFR ETF foating rate from WisdomTree and BOXX from Alpa Arquitects, the new Simplify MBTA has a lot of potential and very unique in the market
Thanks for the info. I will take a look.
Is roc in bndi or cshi tax loss strategy to classify as roc like qqqi and spyi do or is it return of principle?
Best to check your 1099 if you own them to see exactly how it was handled.
I guess the tbill income is converted to a divdend payment as well not interest?
Is CHSI tax efficient, similar to the other NEOS funds?
CSHI uses index options so that portion will get 60/40 tax treatment.
What about thta? It outperforms the others.
Thanks Dave:)
Thanks for watching!
1 to 1.5% extra return doesnt seem like it's worth it
I get it but as a cash alternative it might be attractive just to squeeze out a bit more.
They are negative in their first year, year to date. Yikes. My rollover IRA is at Fidelity and all I do is sell premium plus I’m making just about 5% on the cash set aside to cover short out and call obligations. Cones out to about $2400 a month just in interest! Woohoo like double dipping.
Nice Wayne! Cheers!
I just dont get CSHI....its supposde to yield 1 to 1 1/2 OVER Tbills but this thing is BARELY n I mean barely!!! beating SGOV so where is all this option premium or credit spreads they sell going???!?!!
I agree. I would like to see them try and boost the option portion.
Why has the fund value slowly & steadily decreased since March 1, 2023? Down 0.5%.
It will stay around $50/share. Up and down slightly based on the inflow/outflow and the option strategy.
I think you lose the state tax exemption when investing in a Tbill ETF.
Is there an roc in this? like spyi
Not sure... I would not expect it but you may find it some years.
I like all of these - CSHI, HIGH
Good to know the options!
Im in both
I kind of like the idea of having both in lieu of just cash.
I thought i had ALL monthly dividend stocks lol.i though
I will be adding tomorrow thanks to u
@@nickg1718 Ha!
Picking up nickels in front of a steamroller.
A little bit of that going on with this one...
@@wealthadventures The consyant NAV erosion with HIGH is criminal.
Solid fund. Happy to be there with all the chaos going on.
I keep wondering when that chaos will arrive? Keeps getting punted into the next quarter!
BTW, Dave, give me your cash, and I wll give you a guaranteed 10%, and the rest will be mine. Is it time for me to start my own ETF, called REZA?
you can't guarantee 10% return without min risk...
@nikolaygannev4294 Well, I was going to start a Ponzi scheme, and you caught me ☺️
REZA ETF? That will get all my $$$'s!
@@wealthadventures lol, Mr. REZA is watching too much movies I guess:))
@nikolaygannev4294 Recently, I'm only watching the Turkish TV series... no more Hollywood movies.
Kool
HIGH is decaying. It's not holding the $25. All of these guys are a bunch of gimmicks, IMHO.
Since inception, HIGH still has a higher Total Return than CSHI.
The decay is not outpacing the dividend.
@user-jo2iq6so7d well, give it one year, and you'll see it will give back half of that 10%, so it becomes just like the 5% you can get from the Fidelity money market.
@@TobySchnoodle Yes for the last 2 months, however all the other 10 months had no ROC. What matters is overtime, some months short and some over. Agreed the short term trend is not good.
The past few months especially. HIGH usually rallies back after the distribution drop leading up to the next one but it has not been doing that recently.
I just ran the numbers for this on market beat dividend calculator Starting with 100 shares , it would take 5 years with drip and an annual contribution of 1200 to reach 200 shares and an annual dividend of a meager $290. This s*** is so not worth it. At the end of 5 years. Your new total balance would be $13100. This company is a joke 😂
This is not a beat the market etf. It's a beat your cash money market account fund .Park the cash in this fund until you deploy it to the market beating etf du jour of your choice
This is an alternate for your cash position if you have one. A little more risk for a little more reward.