Employing covered calls remains one of the most popular and basic options trading strategies, but also one of the most overused or misapplied. Some newly launched funds can help individual investors introduce a slice of this conservative, but somewhat labor intensive, strategy into their long-term portfolio investment pie. (For a primer on covered calls, click here .) In July, the ( MCN) Madison/Claymore Covered fund raised $260 million, and in August, ( FFA) First Trust/Fiduciary Asset Management Covered Call fund raised $338 million. Unlike some existing mutual funds that use options, these two are closed-end funds, meaning they will not be accepting new investors or even new money from existing investors. But one can buy (and sell) stakes in their publicly traded shares. Both funds are benchmarked to the Chicago Board Options Exchange's (CBOE) BXM Buy Write Index (BXM). Last year, I wrote about the CBOE licensing its BXM Index to be named as both a benchmark and replicated by money management firms in an attempt to bring covered-call strategies to the masses and capitalize on investors' desire to stabilize returns and reduce risk after a five-year roller coaster ride. The BXM Index is based on applying a purely mechanical buy-write program to the S&P 500 Index, in which 30-day at-the-money calls are sold against a long position in the underlying index. Click here for details on the construction and methodology of the BXM Index. The bottom line is that over the past 15 years, the BXM has delivered a compounded annualized return of 12.39%, slightly better than the SPX's 12.20%, but with 34% less volatility or market risk. The use of options to reduce portfolio risk and volatility, especially through covered-calls writing, received another boost last month when Chicago-based research firm Ibbotson Associates published a study on Passive Options Investment Strategies , with a particular focus on the buy-write strategy based on the BXM Index. This study, combined with a growing acceptance of using options to manage risk and deliver more stable returns, helped the successful launch of the two new covered-call funds this past summer.