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 June 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 June roll period. They outline their influence over the option pricing environment and help substantiate changing investor sentiments as characterized by specific market indicators.
July 2025 Covered Call Report – Key Takeaways
- The Nasdaq 100 and S&P 500 recorded total returns of 1.01% and 0.30%, respectively, during the Global X Covered Call suite options roll period stretching from May 16th, 2025 to June 20th, 2025 as the market rally that followed easing of trade tensions between the U.S. and China in late April lost some steam.1 Investors seemed to retain positive sentiment around the ultimate impact that tariffs would have on the domestic economy. However, new concerns arose after the growing U.S. deficit led Moody’s Corp. to downgrade the credit rating of the nation’s debt instruments from Aaa to Aa1.2 The market proceeded to recover after economic data releases outlining contained inflation and maintained strength of the domestic jobs market pacified concerns. However, call premiums attained by the Global X Suite of covered call products were typically more generous than the abovementioned returns.
- Discounting the impact of the domestic debt downgrade, which contributed to the Cboe Volatility Index (VIX) briefly recapturing the 20 level in late May, a resurgence in volatility then also occurred from June 10th through the end of the roll period on June 20th as a function of rising geopolitical tensions in the Middle East. The combination of events led the VIX to close, on average, in the 19 vicinity over the course of the roll period.3 Consequently, the Global X S&P 500 Covered Call ETF received a premium of 2.00% on June 20th, residing in the upper quartile of all premiums it’s received over the last two years.
- As the June 20th - July 18th roll period commenced, a ceasefire agreement between adversaries in the Middle East contributed to a material decline in volatility, with the VIX sitting at 16.73 at the close of business at the end of the second quarter.4 That said, it remains to be seen the degree to which recent tariffs will influence price inflation and consumer spending as 2025 rolls on, and economic data points due to be released around this information in the second half of the year could potentially lead volatility to return to historic norms.
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