One of the most impressive companies in the ETF space over the last few years has been NEOS Investments. Since launching its first fund in 2022, NEOS has grown its offerings to 16 funds, some of which manage multiple billions in assets under management (“AUM”).
Today, I’m going to take a look and share option trading insights into the funds under the NEOS Equity Income family.
I’m a firm believer in buying what you know, and it is one of my goals this year to elevate my knowledge of income investing to the next level.
Being more regularly aware of what these ETF providers are doing on a monthly or even daily basis is a good start, and I’m sure the work I do will not just benefit myself, but investors far and wide as well.
And so, this is going to be one of the first of hopefully many articles that actively dig into what’s happening across various income ETFs.
Let’s start with the NEOS S&P 500 High Income ETF (SPYI), NASDAQ 100 High Income ETF (QQQI), Russell 2000 High Income ETF (IWMI), and MSCI EAFE High Income ETF (NIHI).
Table of Contents
Current Option Positioning Across SPYI, QQQI, IWMI, and NIHI
SPYI’s Options
As of January 1, 2026, SPYI is currently short two SPX call options. Both call options are set to expire February 20, 2026, and are sold out of the money (“OTM”). SPYI is also short both at 3745 contracts.
The first call option has a strike price of 6985. The option premium per share, according to NEOS, was $72.25, which, multiplied by 100 (number of shares per contract) and 3745 (number of contracts sold), gives us $27.06M. This is the revenue generated by the first call option.
The second call option has a strike price further OTM at 7055. The option premium per share on this option was $46.00, which leads to total option premium earnings of $17.23M.
For further context, the S&P 500’s level at the time of writing sits at 6845. This means the first and second call positions are about 2.05% and 3.07% OTM, or in other words, the S&P 500 will have to rise more than 2.05% by February 20 before SPYI begins capping upside returns.
The contracts also have a total notional value of about $5.26B. Compared to SPYI’s current net assets of $6.90B, this means SPYI has not sold options covering the entirety of its portfolio and has left about 24% open to full uncapped appreciation.
QQQI’s Options
QQQI is positioned similarly to SPYI, with two index call option positions both expiring February 20, 2026.
The difference is that QQQI sells call options on the NASDAQ 100, which, due to the index’s generally higher implied volatility and growth potential, has allowed QQQI to generate more option premium relative to its NAV.
The first call option has a strike price of 25825, while the second one is at 26226. Compared to the NASDAQ 100’s current level of 25249, these call options are about 2.28% and 3.87% OTM.
QQQI has sold 949 contracts of each. The first option generated premiums exceeding $39.25M, and the second at about $24.39M.
Notional values for QQQI’s current options are even lower than SPYI, with only about 66.42% of the portfolio covered.
IWMI’s Options
The story continues to repeat as we move onto NEOS’ small-cap covered call ETF, IWMI.
IWMI has generated option revenue at levels very similar to QQQI relative to the funds’ respective NAVs.
Once again, IWMI has sold two call options, both expiring February 20, 2026.
Compared to the Russell 2000 index’s current level of 2481, both options are 2.78% and 4.39% OTM with their respective strike prices at 2550 and 2590.
588 contracts of both options were sold at $40.55 and $27.15 per share for total combined revenues of $3.98M.
The total notional value of IWMI’s options sits at $302.23M, or much like QQQI, 66.99% of its net assets.
NIHI’s Options
The final fund to discuss in NEOS’ Equity Income family is their newest fund, NIHI.
Unlike the previous three funds, the index that NIHI tracks is more thinly traded and generally less volatile, as it covers the entire global investable market outside of the U.S. and Canada.
The result is that NIHI has sold its options much closer to the index’s current level of 2897 at 2930 and 2970 or 1.14% and 2.25% OTM.
Again, both options are set to expire on February 20, 2026. 46 contracts of each option have been sold for total option premium revenues of $270,480. Notional values are also similar to the other funds, with 60.24% of the portfolio covered.
Will SPYI, QQQI, IWMI, and NIHI Reach Their Distribution Targets?
What has stood out from each fund is that the option premiums generated are not reaching NEOS’ target/past distribution levels.
SPYI is a good example.
The fund generally yields around 12% annually, which means the fund must generate approximately 1% of its net assets from selling call options monthly to fully cover those targets.
At the current levels, SPYI has only generated 0.64%. That means another 0.36% must come from sources such as the sale of underlying assets and dividends paid from stocks.
Granted, NEOS has opened up more of its portfolio for capital appreciation. They have flexibility on many of the funds to sell another call option to reach the desired distribution levels.
There is still time after all, as the next ex-dividend date for all four funds is January 21, 2026.
It should be kept in mind that the revenue from these call options is generally not immediately put towards the next distribution either. Much of it is likely to come from the previous option trades.
So, really, what will be the most interesting to watch for is whether the respective underlying indices rise past the strike prices that NEOS has set.
Until then, here’s the most recent analysis on Seeking Alpha that various contributors have shared.
SPYI Analysis
- “FYEE Vs. SPYI In S&P 500 Enhanced Arena: Both Rated Hold” — Retired Investor on December 5, 2025 | Hold
- “SPYI: Save On Taxes With A Double-Digit Yield” — A. J. Button on November 29, 2025 | Buy
- “SPYI Vs. SPY: The Case For Covered Calls In Two Charts” — Sensor Unlimited on November 26, 2025 | Buy
QQQI Analysis
- “QQQI: Don’t Chase Large Distribution Yield” — Stone Fox Capital on December 30, 2025 | Sell
- “QQQI: This Popular 13% Yield Looks Perfect — Until You Dig Into The Details” — High Yield Investor on December 27, 2025 | Hold
- “QQQI: 0.02% SEC Yield Vs The 14% Distribution Yield” — Trapping Value on December 26, 2025 | Strong Sell
IWMI Analysis
- “IWMI: Tax-Efficient Distributions From The Russell 2000 Index (Rating Upgrade)” — Cain Lee on December 20, 2025 | Buy
- “IWMI: Small Caps, Big Dividends” — Jack Bowman on December 12, 2025 | Buy
- “IWMI & IWM — Which Is The Better Bet On Small-Cap US Stocks?” — Far Horizon on November 10, 2025 | Hold
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