Exchange to Announce KOSPI 200 and Weekly Options Derivative Strategy Index on the 21st

The Korea Exchange announced on the 16th that it plans to launch the 'KRX Bloomberg KOSPI 200 Dynamic Weekly Covered Call Index,' a derivative strategy index investing in the KOSPI 200 and weekly options, on the 21st.

This index pursues a covered call strategy that invests in the KOSPI 200 while deciding whether to sell call options based on indicators utilizing option implied volatility to predict market conditions. The index was co-developed using Bloomberg's advanced methodology for covered call strategy indices.

Unlike traditional covered call strategies, which limit profits when the underlying asset rises, this index determines whether to sell call options depending on market conditions, allowing it to collect option premiums while participating in gains from the KOSPI 200's rise.

According to the Exchange, since September 2019, the cumulative return of this index has been 33.2%, outperforming the KOSPI 200 Weekly Covered Call Index by 14.9 percentage points.

In particular, it has shown high returns during bullish periods and demonstrated excellent long-term performance.

The Exchange stated that this index is expected to be used as an underlying index for ETFs and other products, meeting investment demand that seeks stable returns while responding to market conditions.