If you like the basic idea behind the Covered Call ETF, you might be tempted to do it yourself. Build your own personal Covered Call ETF and reap the benefits without having to pay the cost of involving professional fund managers. You will also get to make your own decisions regarding all transactions, and this can of course be very appealing for investors seeking a high degree of autonomy and flexibility.

If you want to give this a shot, this is a basic formula that you can use for a start and then gradually modify to suit your needs and preferences.

• Be long in specific stocks or in an entire index
• Issue options on some of the shares each month
• Roll or close options prior to expiry

You should be aware however that doing all these trades each month can consume a lot of time and effort. It will be difficult for you to ever take a break from trading and go on vacation or focus on other activities (or even take time off to be sick) and still keep the revenue coming.

Also, there will be transaction costs, and your individual transaction costs might be considerably higher than those negotiated by a large ETF. Unless you are an extremely wealthy individual, economy of scale tend to make transactions less costly for big ETFs than for individual traders.

You also need to be skilled enough and updated enough to continuously figure out the most beneficial options to issue and when. Usually, such decisions are based on analyzing all “the Greeks” for the options.

Compared to exchange traded stocks, options tend to have a comparatively big bid-ask spread, so the cost of actually carrying out transactions can be significant.