Monthly Covered Call Commentary: January 2026

The Global X Research Team is pleased to announce the release of its Monthly Covered Call Report, featuring the premium and distribution values attained by its roster of covered call funds in December of 2025. The key takeaways below, as well as those highlighted within the report, recap some of the most pivotal undertakings to have taken place across the markets during the December roll period. They outline their influence over the option pricing environment and help substantiate changing investor sentiments as characterized by specific market indicators.

January 2026 Covered Call Report – Key Takeaways

• After uncertainty surrounding the path of interest rates and AI infrastructure spending led many domestic equity indices to take a step back in value during the November roll period for the Global X covered call suite, which stretched from October 17th to November 21st, growth resumed this past month on the heels of news that pacified many of these concerns. First, the Federal Reserve (Fed) proceeded to cut the benchmark interest rate by 25 bps on December 10th. Then, a prominent memory and storage manufacturer announced strong fiscal first-quarter earnings results and raised future revenue guidance to reflect stout demand for AI infrastructure.¹ Finally, a batch of economic reports that were delayed by the recent government shutdown were ultimately released, and they outlined tame rates of inflation and stabilization of the labor market.² All this led the major domestic equity indices to appreciate in the low- to mid-single digit percentage vicinity on a total return basis.³
• The Cboe Volatility Index (VIX) kicked off the November 21st to December 19th roll period in the vicinity of a seven-month high.⁴ However, the downward trajectory that the fear gauge assumed en route back to historic norms ended up being maintained for essentially the entirety of the term. The undertaking pressured option premium values for much of the suite. The Global X Nasdaq 100 Covered Call ETF (QYLD) and the Global X Russell 2000 Covered Call ETF (RYLD), however, were still able collect premiums North of 2%.
• Large-cap equity indices within the US rallied from November 20th into the end of the year to trade back in the vicinity of their all-time highs.⁵ That said, uncertainty surrounding the path of interest rates, equity values, and the labor market all remained top of mind. The rate backdrop and the rationale behind AI spending were key drivers of market volatility in the fall of 2025, and further repricing of the Fed’s rate trajectory or AI’s return on investment could have similar ramifications in the New Year. Inflation will play a key role, as will a healthy consumer. And with these functions of the economy still possessing room for surprise, the market may maintain its upward trajectory in 2026, but it could be a volatile path.