The First Trust NASDAQ BuyWrite Income ETF (NASDAQ: FTQI) has experienced a significant reduction in short interest, with a reported decline of 51.1% in December. As of December 31, 2023, the total short interest stood at 42,636 shares, down from 87,110 shares recorded on December 15, 2023. This decline indicates a notable shift in investor sentiment towards the fund, which focuses on income generation through a strategy that combines equity investments and options trading.
The current short interest represents only 0.1% of the company’s stock. With an average daily trading volume of 157,318 shares, the days-to-cover ratio is approximately 0.3 days, suggesting that the short positions could be covered quickly if needed.
Market Performance and Trading Activity
During midday trading on January 5, 2024, shares of FTQI traded down by $0.03, reaching a price of $20.99. A total of 308,069 shares changed hands, slightly below the average volume of 308,870 shares. Over the past year, FTQI has seen a low of $16.25 and a high of $21.36, reflecting volatility in its market performance. The fund’s 50-day moving average price is $20.82, while the 200-day moving average stands at $20.47. Currently, the market capitalization of the First Trust NASDAQ BuyWrite Income ETF is approximately $766.14 million, with a price-to-earnings ratio of 32.31 and a beta of 0.59, indicating lower volatility compared to the broader market.
Dividend Announcement
In addition to its trading performance, FTQI recently declared a monthly dividend of $0.205 per share, which was paid on December 31, 2023. Shareholders who were on record as of December 12, 2023, received this dividend, which translates to an annualized yield of 11.7%. The ex-dividend date was also set for December 12, making it an important date for investors looking to capitalize on the fund’s income potential.
The First Trust NASDAQ BuyWrite Income ETF primarily invests in large-cap equities and employs an actively managed portfolio strategy that includes short call options on the NASDAQ 100. Launched on January 6, 2014, this fund is managed by First Trust, a notable player in the investment management sector.
As market dynamics continue to evolve, the significant drop in short interest and the recent dividend payment may reflect growing confidence in the fund’s performance moving forward. Investors will likely keep a close watch on FTQI as it navigates the challenges and opportunities within the equity markets.
