A Better ETF Solution for Call-Writing Funds

The recent listing of the PowerShares S&P 500 Buy Write Portfolio (PBP Quote) reminded me of how much of a nerd I am -- who else could get excited about the launch of another call-writing fund?

The reason I'm so thrilled is that, while call-writing strategies have been available for a while through closed-end funds and more recently through an exchange-traded note, this is the first time one has been offered through an exchange-traded fund.

PBP has the potential to overcome some of the downside to investing in a "buy-write" strategy through those other investment vehicles.

Buy write is a strategy that involves buying a stock and selling call options, which are rights to buy that stock at a predetermined price. The upside can be smoother returns, as the income generated by selling call options can help offset declines in any portfolio holdings. This is especially helpful in a down or flat market. ...