Covered calls can be a strategic path towards increasing cash flow on a position while waiting for it to rally.
For instance, last week a trader purchased 15,000 covered calls in iShares MSCI Emerging Markets ETF (EEM).
EEM is a popular asset class ETF used to gain exposure to emerging markets.
This trade is using out-of-the-money January 2025 calls, which could be a way to generate additional cash on the position while expecting a long-term rally in emerging markets.
