First Trust Financials AlphaDEX (FXO) Covered Calls
The First Trust Financials AlphaDEX Fund is a smart-beta ETF that provides exposure to U.S. financial companies. It utilizes the proprietary AlphaDEX methodology to select stocks from the Russell 1000 index, ranking them based on growth and value factors. The fund aims to outperform traditional market-capitalization-weighted financial sector indices by focusing on companies with superior risk-adjusted return potential.
You can sell covered calls on First Trust Financials 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 FXO (prices last updated Mon 10:25 AM ET):
| First Trust Financials AlphaDEX (FXO) Stock Quote | ||||||
|---|---|---|---|---|---|---|
| Last | Change | Bid | Ask | Volume | P/E | Market Cap |
| 54.90 | +0.44 | 54.87 | 54.95 | 9K | - | 2.1 |
| Covered Calls For First Trust Financials AlphaDEX (FXO) | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Net Debit | Return If Flat |
Annualized Return If Flat |
|
| Apr 17 | 55 | 0.35 | 54.60 | 0.6% | 11.5% | |
| May 15 | 55 | 0.10 | 54.85 | 0.2% | 1.6% | |
| Subscribers get access to the full covered call chain, and more features. | ||||||
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The First Trust Financials AlphaDEX Fund (FXO) employs a rules-based, multi-factor selection process designed to identify high-potential companies within the financial services sector. By screening for growth and value characteristics, the fund tilts its portfolio toward firms that may exhibit stronger fundamental performance than those selected by simple market-cap weighting. Its holdings span various sub-industries, including banks, insurance providers, investment firms, and credit services.
The fund's "AlphaDEX" approach results in a portfolio that can look significantly different from traditional sector ETFs, often maintaining a mid-cap tilt and higher diversification across smaller or more niche financial institutions. This makes it a distinct choice for investors seeking a quantitative approach to financial sector exposure.
Competitive Landscape
FXO competes in a crowded financial sector ETF space. Its primary competitive differentiators include:
- Smart-Beta Methodology: Unlike passive, cap-weighted funds that hold companies strictly based on size, FXO actively filters for specific growth and value metrics to tilt the portfolio toward higher-quality candidates.
- Diversified Sub-Sector Exposure: The fund’s methodology often leads to a broader mix of insurance and specialized financial companies, providing different performance drivers than pure-play banking ETFs.
- Peer Alternatives: FXO competes with broad-based financial ETFs like the Financial Select Sector SPDR Fund and the Vanguard Financials ETF, as well as more focused options like the SPDR S&P Bank ETF.
Strategic Outlook and Innovation
The strategic outlook for FXO is centered on the persistent evolution of the financial landscape. As traditional banking models integrate with new fintech solutions, the fund’s rules-based rebalancing allows it to rotate into companies that demonstrate stronger momentum or value. Innovation in this fund is defined by the AlphaDEX screening process, which systematically removes human bias, focusing purely on measurable financial data to drive stock selection.
Looking ahead, the fund remains a robust option for those who believe that fundamental factor analysis can yield better outcomes than broad market-cap indices. Its structure provides a transparent, low-cost way to implement a sophisticated, multi-factor quantitative strategy without the need for individual stock picking.
| Top 10 Open Interest For Apr 17 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | SLV covered calls | 6. | QQQ covered calls | 1. | REPL covered calls | |
| 2. | EEM covered calls | 7. | GLD covered calls | 2. | CIFR covered calls | |
| 3. | NVDA covered calls | 8. | TLT covered calls | 3. | BE covered calls | |
| 4. | KWEB covered calls | 9. | HYG covered calls | 4. | MARA covered calls | |
| 5. | SPY covered calls | 10. | EWZ covered calls | 5. | NKE covered calls | |
Want more examples? FXN Covered Calls | FXP Covered Calls
Risk Disclosure: Trading options involves significant risk and is not suitable for all investors. The information provided on this website is for educational and informational purposes only and does not constitute financial, investment, tax, or legal advice. Nothing contained on this site is an offer to buy or sell, or a solicitation of an offer to buy or sell, any securities or financial instruments.
Covered Call Strategy Risks: While covered call writing is often considered a conservative options strategy, it is not without risk. By selling a covered call, you are limiting your potential upside profit from the underlying stock. You remain exposed to the full downside risk of owning the underlying stock. In the event of a significant decline in the stock price, the premium received may not be sufficient to offset your losses.
No Guarantee of Performance: Past performance is not indicative of future results. Any examples, calculations, or hypothetical scenarios presented on this site are for illustrative purposes only and do not guarantee future returns or outcomes. Market conditions, liquidity, and trading system failures can affect your ability to execute trades at desired prices.
You should consult with a qualified professional advisor and conduct your own due diligence before making any investment decisions. By using this website, you acknowledge that you are responsible for your own investment decisions and agree to release this site and its affiliates from any liability relating to your use of this information. See the OCC's Characteristics and Risks of Standardized Options for more info.
