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Powershares Sp 500 Buywrite

PowerShares SP 500 BuyWrite Portfolio (PBP) is a type of exchange-traded fund (ETF) that tracks the performance of the S&P 500 index, while also incorporating a covered call strategy. The fund is managed by Invesco PowerShares Capital Management LLC.

The ETF aims to provide investment results that correspond to the price and yield performance of the CBOE S&P 500 BuyWrite Index (BXY). This index is designed to track the performance of a hypothetical buy-write strategy on the S&P 500 index.

A buy-write strategy, also known as a covered call, involves holding a long position in an underlying asset, such as the S&P 500, and selling call options on that same asset. The call options give the buyer the right, but not the obligation, to buy the underlying asset at a specified price (strike price) before a specified date (expiration date).

The PowerShares SP 500 BuyWrite Portfolio implements this strategy by holding a portfolio of S&P 500 stocks and simultaneously writing (selling) call options on the SPDR S&P 500 ETF (SPY). The fund receives a premium for selling the call options, which can help to offset management fees and potentially enhance returns.

Investors should be aware that using options involves certain risks, and the fund may not achieve its investment objective due to various factors, such as changes in market conditions or option prices.

It is recommended that interested individuals consult a financial advisor or conduct their own research before making investment decisions.