First Trust Morningstar Dividend Leaders Index Fund (FDL) Covered Calls

Running FDL covered calls helps you generate income from First Trust Morningstar Dividend Leaders Index Fund shares you already own, turning a long stock position into a yield producing asset. A covered call means holding the underlying stock and selling a call option against it, collecting premium in exchange for capping upside at the strike. Use our scanner to find the best FDL covered calls in real time and filter for the strikes, expiries, and premiums that fit your strategy.

A covered call pairs limited risk with a clear income profile. If FDL stays below the strike at expiration, you keep the premium and the shares. If it rises above, you deliver the stock at the strike and still pocket the premium. Selling FDL covered calls works best when implied volatility is elevated, since richer premiums improve the risk reward. Key inputs include strike selection relative to delta, days to expiration, annualized return, and probability of assignment, all of which determine whether a given FDL covered call is worth writing.

The First Trust Morningstar Dividend Leaders Index Fund is an exchange-traded index fund. The investment objective of the Fund is to replicate as closely as possible, before fees and expenses, the price and yield of the Morningstar Dividend Leaders IndexSM.