First Trust Technology AlphaDEX (FXL) Covered Calls

The First Trust Technology AlphaDEX Fund (FXL) is an exchange-traded fund that tracks the NASDAQ AlphaDEX Technology Index. It employs a quantitative, factor-based methodology to select stocks from the technology sector that demonstrate high potential for capital appreciation based on price, growth, and value factors. Unlike traditional market-cap-weighted tech funds, FXL rebalances its portfolio quarterly to favor companies with stronger fundamental characteristics.

You can sell covered calls on First Trust Technology AlphaDEX to lower risk and earn monthly income. Born To Sell's covered call screener gives you customized search capabilities across all possible covered calls but here are a couple of examples for FXL (prices last updated Fri 4:16 PM ET):

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Core Business and Products

The First Trust Technology AlphaDEX Fund (FXL) provides an "enhanced" exposure to the U.S. technology sector. By utilizing the AlphaDEX methodology, the fund screens for stocks that show the strongest momentum, earnings growth, and value metrics. This systematic selection process tilts the portfolio away from purely market-cap-weighted behemoths and toward technology companies that exhibit high-quality fundamental trends.

The fund is structured as a passive, quantitative ETF that provides concentrated exposure across the technology landscape, including semiconductors, software, and hardware manufacturing. Its quarterly rebalancing mechanism ensures that the fund consistently emphasizes stocks currently exhibiting the strongest fundamental metrics, making it a dynamic tool for investors who want to capture technology trends through a rules-based, rather than discretionary, approach.

Competitive Landscape

FXL competes with broad-market technology ETFs like the Technology Select Sector SPDR Fund. While XLK provides exposure to the largest tech names weighted by market size, FXL differentiates itself by applying a fundamental screen. This creates a performance profile that can deviate from the broad tech sector, offering potential outperformance when smaller or mid-sized "alpha-generating" tech stocks are leading the market.

The fund holds a diverse array of companies, often including industry leaders like NVIDIA, Microsoft, and other firms experiencing rapid growth. While FXL is a significant fund, it is not always as liquid as the ultra-high-volume sector indices, so traders should monitor bid-ask spreads when executing larger orders.

Strategic Outlook and Innovation

The strategic outlook for FXL is tied to the persistent demand for technological innovation in the global economy. As companies accelerate their digital transformation initiatives—integrating artificial intelligence, cloud computing, and advanced analytics—the firms selected by the AlphaDEX methodology are positioned to benefit from these secular growth trends. The fund serves as a systematic vehicle for capturing this growth while attempting to avoid overvaluation traps.

Innovation in this space is defined by the ongoing refinement of quantitative screening models to better account for the unique characteristics of tech companies, such as high research and development spending and fluctuating growth rates. FXL remains a durable tool for investors seeking a disciplined, factor-based approach to the most dynamic sector in the modern economy.

Want more examples? FXI Covered Calls | FXN Covered Calls