NEOS Nasdaq 100 High Income ETF (QQQI) Covered Calls

The NEOS Nasdaq-100 High Income ETF is an actively managed fund that seeks to provide high monthly income and capital appreciation through a tax-efficient covered call strategy. It invests in a portfolio of Nasdaq-100 Index stocks and utilizes Section 1256 contracts for its options overlay. The fund is designed for investors seeking "Big Tech" exposure with enhanced upside participation and potential tax advantages compared to traditional buy-write strategies.

You can sell covered calls on NEOS Nasdaq 100 High Income ETF 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 QQQI (prices last updated Thu 4:16 PM ET):

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NEOS Nasdaq-100 High Income ETF is a next-generation derivative-income vehicle that aims to deliver a monthly paycheck while maintaining exposure to the growth-oriented technology sector. Launched in early 2024, QQQI has rapidly scaled in assets under management (AUM) by offering a more refined and tax-aware alternative to legacy covered call funds.

Core Strategy and Operations

1. Nasdaq-100 Equity Core: The fund seeks to replicate the performance of the Nasdaq-100 Index by investing in its component securities, including tech giants like NVIDIA, Apple, and Microsoft. This foundation allows shareholders to benefit from the capital growth and dividends of the world’s most innovative companies.
2. Sophisticated Options Overlay: QQQI utilizes an active options strategy that involves writing (selling) call options on the Nasdaq-100 Index. A distinguishing feature is the potential use of "call spreads"—where the fund buys long, out-of-the-money calls to cap its upside limitations. This mechanism is designed to allow for greater participation in the index's price rallies than traditional "100% covered" strategies.
3. Tax Efficiency and Payouts: The fund is specifically engineered for tax efficiency. It utilizes Section 1256 contracts (index options), which qualify for 60% long-term and 40% short-term capital gains treatment, regardless of holding period. In 2026, the fund maintains a monthly distribution schedule, often reporting high yields that are partially classified as Return of Capital (ROC) for tax-deferral purposes.

Competitive Landscape

QQQI is a primary competitor to the JPMorgan Nasdaq Equity Premium Income ETF and the Global X NASDAQ 100 Covered Call ETF. Its use of Section 1256 contracts and its more flexible upside capture also position it as an alternative to the REX FANG & Innovation Equity Premium Income ETF and the YieldMax AI & Tech Portfolio Option Income ETF. For investors seeking a "boosted" version of this strategy, NEOS also offers the NEOS Boosted Nasdaq-100 High Income ETF.

Strategic Outlook

As of 2026, QQQI has established itself as a leader in "intelligent" income generation. The fund manages a total expense ratio of 0.68%, which is competitive for an actively managed derivative product. Management’s strategy focuses on dynamic strike selection to harvest high implied volatility from the tech sector while minimizing NAV erosion. This makes the fund particularly attractive in sideways or moderately bullish markets. While it provides a significant income cushion, it remains subject to the drawdown risks of the Nasdaq-100, and its total return may trail the pure index during periods of extreme, vertical price appreciation.

Want more examples? QQQE Covered Calls | QQQJ Covered Calls