FT Cboe Vest U.S. Equity Deep Buffer ETF - October (DOCT)

JD_co

2 new ETFs from First Trust claim to help limit downside in equities if the market declines. Not sure if these products would interest anybody here. Also not certain if they will "work", but I will probably track them (DOCT and FOCT) for now. DOCT has lower limits than FOCT. I remain skeptical until I see how they perform.


FT Cboe Vest U.S. Equity Deep Buffer ETF - October (DOCT)

Investment Objective/Strategy - The investment objective of the FT Cboe Vest U.S. Equity Deep Buffer ETF - October (the "Fund") is to seek to provide investors with returns (before fees, expenses and taxes) that match the price return of the SPDR® S&P 500® ETF Trust (the "Underlying ETF"), up to a predetermined upside cap of 9.34% (before fees, expenses and taxes) and 8.49% (after fees and expenses, excluding brokerage commissions, trading fees, taxes and extraordinary expenses not included in the Fund's management fee), while providing a buffer against Underlying ETF losses between -5% and -30% (before fees, expenses and taxes) over the period from October 19, 2020 to October 15, 2021. Under normal market conditions, the Fund will invest substantially all of its assets in FLexible EXchange® Options ("FLEX Options") that reference the performance of the SPDR® S&P 500® ETF Trust.

Mitchelg

I would rather beef up my cash allocation if I felt the market was ready to tank.

rforno

This sounds like the ETF version of Barrier Notes / Principal Protected Notes that were all the rage going into the GFC.

You could do the same thing with a short straddle/strangle on the SPY and save your management fee.

Hard pass from me!