Defiance ETFs has launched a new actively managed exchange-traded fund (ETF) focused on "zero day to expiry" (0DTE) options, according to an announcement made on Wednesday. The Defiance S&P 500 Enhanced Option Income ETF (NYSE:JEPY), now available on the New York Stock Exchange, uses daily options to augment income associated with the S&P 500.
The objective of JEPY is to consistently provide substantial monthly yield distributions, while also offering investors exposure to the S&P 500 equity market. To fulfill this goal, the fund sells option premiums daily, leveraging daily options to benefit from swift time decay by selling in-the-money puts with 0DTE.
The 0DTE market has recently attracted increasing attention from retail investors. Current estimates indicate that these investors represent about 5% of the volume in contracts related to the S&P 500 that expire within a day. However, Jonathan Zaionz, senior derivatives analyst at Cboe Global Markets (NYSE:CBOE), suggests this figure could be closer to 40%.
The introduction of JEPY aims to give investors a more transparent and liquid path to implement this strategy. Sylvia Jablonski, CEO of Defiance, said that JEPY offers a unique approach for income generation and has the potential to reshape S&P 500 options income strategies within the ETF landscape.
This new product follows Defiance ETFs' prior listing in June of the Defiance Pure Electric Vehicle ETF (NYSE:EVXX), which is designed for pure exposure to manufacturers in the electric vehicle industry.
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