Option Income Fund

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Dictionary Says

Definition of 'Option Income Fund'

A type of mutual fund with the goal to generate current income for its investors from the premium it earns by selling option contracts. The profits investors earn on the options are taxed as ordinary income, not as dividends, so option income funds are best held in tax-advantaged accounts. This income generating strategy is much riskier than investing in dividend paying stocks, although the returns can be much higher.
Investopedia Says

Investopedia explains 'Option Income Fund'

In his 2005 report to the Securities and Exchange Commission (SEC) stating that Madoff’s hedge fund was a fraud, Harry Markopolos compared the Gateway Option Income Fund (GATEX) and other option income funds to Madoff's fund. This comparison showed that Madoff's returns were not realistic. These were just two of the 29 red flags Markopolos reported to the SEC in his 19-page memo.

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'Option Income Fund'

  • Another Option For Income

    http://stocks.investopedia.com/stock-analysis/2012/Another-Option-For-Income-PBP-BDJ-INB-IGD-SDY0215.aspx
    ... put generates income from the fee the option buyer pays. ... these call writing strategies
    offer big income potential ... Of Covered Calls.) Finding a Fund For investors ...

  • Replace Your Income With Dividend-Paying Investments

    http://stocks.investopedia.com/stock-analysis/2011/Replace-Your-Income-With-Dividend-Paying-Investments-PCEF-XMPT-LVL-DEW-BDCL-MLPL-SDIV1013.aspx
    ... the taxable fixed income and equity option writing strategies ... NYSE:ETY) and Aberdeen
    Asia-Pacific Income (NYSE:FAX ... The fund yields nearly 9% and pays a monthly ...

  • Asset Allocation In A Bond Portfolio

    http://www.investopedia.com/articles/04/111804.asp
    ... volatility is a major determinant in all option pricing). ... of the pillars of good
    fixed-income investing ... Mutual fund managers, however, generally don't adhere to ...

  • Series 7 Study Guide - Packaged Securities - Types of Mutual Funds ...

    http://www.investopedia.com/exam-guide/series-7/packaged-securities/mutual-fund-types.asp
    ... Spread Option Strategies; 8.12 Straddle Option Strategies; ... 11.1 Introduction; 11.2
    Client Income Statement; 11.3 ... Ratio Analysis; 12.14 Mutual Fund Analysis; 12.15 ...

  • An Introduction To Closed-End Mutual Funds

    http://www.investopedia.com/articles/mutualfund/07/closed_end_funds.asp
    ... for investment income, the closed-end option is generally ... to use these funds to increase
    your investment income. ... Case In an open-end mutual fund, shares are ...

  • CFA Level 1 Study Guide - Fixed Income Investments - The ...

    http://www.investopedia.com/exam-guide/cfa-level-1/fixed-income-investments/embedded-option-importance.asp
    ... Traditional Yield Curve Measures; 14.41 Importance of Reinvestment Income and
    Reinvestment ... 15.32 Straddles and Strangles; 15.33 Option Prices and the Time to ...

  • Is Your Mutual Fund Safe?

    http://www.investopedia.com/articles/mutualfund/07/mf_safe.asp
    ... it as a way to boost their fund's income, which can ... The fund would give up all of
    the stock's profit ... the strike price as the call holder exercises the option. ...

  • Series 7 Study Guide - Packaged Securities - Mutual Fund ...

    http://www.investopedia.com/exam-guide/series-7/packaged-securities/mutual-fund-distributions.asp
    ... Spread Option Strategies; 8.12 Straddle Option Strategies; ... 11.1 Introduction; 11.2
    Client Income Statement; 11.3 ... Ratio Analysis; 12.14 Mutual Fund Analysis; 12.15 ...

  • Income Funds 101

    http://www.investopedia.com/articles/mutualfund/09/income-funds.asp
    ... Many of these are invested in income producing securities like ... re unfamiliar with
    ETFs, refer to Mutual Fund Or ETF ... par value or, at the issuer's option, at a ...

  • Series 7 Study Guide - Portfolio Management - Mutual Fund Analysis ...

    http://www.investopedia.com/exam-guide/series-7/portfolio-management/mutual-fund-analysis.asp
    ... the section on packaged securities in Chapter 6 "Packaged securities and
    retirement/estate planning", a fund's objective can be either growth or income, ...

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