Trading a FEPI straddle lets you take a pure volatility position on REX FANG & Innovation Equity Premium Income ETF without committing to a direction. REX FANG & Innovation Equity Premium Income ETF's straddle involves buying (or selling) a call and a put at the same strike and expiration, profiting when the stock moves more (or less) than the combined premium implies. Use our scanner to evaluate FEPI straddle pricing in real time and find the moments when expected moves are mispriced.
A long straddle on FEPI profits from large moves in either direction and is a classic play into binary events like earnings, product announcements, or macro releases. A short straddle profits when REX FANG & Innovation Equity Premium Income ETF stays range-bound and implied volatility contracts. The breakeven points are simple: strike plus total premium on the upside, strike minus total premium on the downside. Comparing the FEPI straddle price to historical realized moves helps you judge whether the market is overpaying or underpaying for volatility.
FEPI employs a covered call strategy, aiming for a balance between generating income and participating in potential gains within the technology sector. Specifically, the fund holds the stocks of its benchmark, the Solactive FANG Innovation Index, and writes slightly out-of-the-money call options on them. This approach capitalizes on the volatility of big-tech firms that is reflected in the option premiums, while limiting some of the potential stock gains. It also provides a small buffer against declines in stock prices. Note that the buffer is limited to the options premiums and may not fully offset underlying security losses.
The benchmark is an equal-weighted index comprised of 15 US technology companies, eight of which are core holdings: Apple, Alphabet, Amazon, Meta, Microsoft, Netflix, Nvidia, and Tesla. The remaining seven are selected based on quarterly trading volumes from various Factset technology-related industries.
Earnings, product cycles, macro prints — any time volatility itself is the trade, the FEPI straddle is the cleanest expression of that view. Our scanner prices every FEPI straddle against historical realized moves, flags expirations where the market is overpaying or underpaying for vol, and ranks setups by breakeven width and IV rank. Whether you're long a FEPI straddle into a catalyst or short a FEPI straddle to harvest decay, the options straddle setups that matter are all in one place.
