REX FANG & Innovation Equity Premium Income ETF (FEPI) Covered Calls

The REX FANG & Innovation Equity Premium Income ETF is an actively managed fund that provides capital appreciation and high monthly income through a covered call strategy on top-tier technology stocks. It holds an equally-weighted basket of 15 highly liquid big-tech companies and writes out-of-the-money call options on each. It is designed for investors seeking "Big Tech" exposure with a focus on maximizing yield through the sector’s high implied volatility.

You can sell covered calls on REX FANG & Innovation Equity Premium Income ETF to lower risk and earn monthly income. Born To Sell's covered call screener gives you customized search capabilities across all possible covered calls but here are a couple of examples for FEPI (prices last updated Fri 4:16 PM ET):

REX FANG & Innovation Equity Premium Income ETF (FEPI) Stock Quote
Last Change Bid Ask Volume P/E Market Cap
42.16 +0.96 42.08 42.50 215K - 0.0
Covered Calls For REX FANG & Innovation Equity Premium Income ETF (FEPI)
Expiration Strike Call Bid Net Debit Return
If Flat		 Annualized
Return If Flat
Feb 20 42 0.00 42.50 -1.2% -29.2%
Mar 20 42 0.05 42.45 -1.1% -9.3%
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Extended Business Description

REX FANG & Innovation Equity Premium Income ETF is a high-yield investment vehicle that seeks to deliver a combination of big-tech capital appreciation and consistent monthly cash flow. Unlike many index-level covered call funds, FEPI utilizes a single-stock option overlay on its underlying holdings, which is intended to provide greater flexibility and a more significant "upside runway" during strong technology rallies.

Core Strategy and Operations

  1. Equally-Weighted Tech Portfolio: The fund invests in the 15 stocks comprising the Solactive FANG Innovation Index. These include "Magnificent Seven" staples such as NVIDIA, Apple, and Microsoft, alongside innovation leaders like Broadcom and Palantir. The portfolio is rebalanced monthly and reconstituted quarterly to maintain equal weighting.
  2. Security-Level Covered Calls: Instead of selling calls on a broad index, the fund writes out-of-the-money (OTM) call options on each individual stock in its portfolio. By positioning these calls typically 5% to 15% OTM, the fund aims to capture a portion of the stock's price appreciation while collecting substantial premiums driven by the high implied volatility of the tech sector.
  3. Cost and Payout Structure: FEPI features a competitive gross expense ratio of 0.65%. In 2026, it maintains a monthly distribution schedule, targeting a high annualized yield that has historically reached into the 20% to 25% range, depending on market conditions. These distributions often consist of a mix of net income and estimated return of capital (ROC).

Competitive Landscape

FEPI is a primary competitor to the REX AI Equity Premium Income ETF and the YieldMax AI & Tech Portfolio Option Income ETF. Its security-level approach is often contrasted with the index-level strategy of the Global X NASDAQ 100 Covered Call ETF, which typically offers less upside participation. It also faces competition from yield-focused NASDAQ products like the NEOS Nasdaq-100 High Income ETF and the JPMorgan Nasdaq Equity Premium Income ETF.

Strategic Outlook

As the AI hardware and software cycle continues to mature in 2026, FEPI is positioned as a tool for "volatility harvesting" among the world's largest companies. Management’s focus remains on maintaining a systematic call-writing program that minimizes "NAV erosion" during flat or slightly bullish markets. While the fund provides a premium-based cushion during minor tech sell-offs, it remains a non-diversified vehicle with significant concentration in the technology industry. Investors utilize FEPI as a tactical core for technology-driven income, accepting that total returns may trail a traditional FANG index during period of extreme, uncapped market growth.