Monthly Covered Call Commentary: March 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 and enhanced income funds in February of 2026. 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 February roll period. They outline their influence over the option pricing environment and help substantiate changing investor sentiments as characterized by specific market indicators.

Key Takeaways

Covered Call ETFs

• Following the October 29th, 2025, to November 20th, 2025, market decline that dethroned domestic equity indices like the S&P 500® and Nasdaq-100® from their all-time highs, large-cap stocks within the United States rallied to close out the year. The S&P 500® and Nasdaq-100®, specifically, exhibited total returns of 4.83% and 5.05%, respectively, over that home stretch, and with markets at the time still anticipating at least two interest rate cuts in 2026 the growth trend was held intact early into the New Year.¹ When the January roll period kicked off, however, sentiment began to shift owing to ongoing trade policy negotiations and rising concerns over the state of employment. Even as markets attempted to shrug off these uncertainties, new risks were deemed to have arisen as 2026 capital spending budgets were announced by some of the world’s mega-cap tech names. The end result was the S&P 500® and Nasdaq-100® losing 0.33% and 1.97% of their value, respectively, during the February roll period from January 16th, 2026, to February 20th, 2026, while the market-cap weighted Dow Jones Industrial Average® was up a modest 0.68%.²
• On January 16th, 2026, the smallest premium acquired by any of Global X’s 100% Covered Call strategies was 1.50%, generated by the Global X Dow 30 Covered Call ETF (DJIA). This was enough, however, for the fund to experience outperformance of 1.19% versus the Dow Jones Industrial Average thru February 20th, 2026 on a net asset value basis.³ In fact, all four of Global X’s Covered Call funds that operate their strategies on major domestic equity indices outperformed their reference assets during the term.⁴ These have now outperformed their reference assets over the last five months, dating back to the first roll period of the fourth quarter of 2025, which began on September 19th.⁵ 

• Excluding the Global X MLP & Energy Infrastructure Covered Call ETF (MLPD), premiums collected by the covered call suite took a modest step back, month to month, when options rolled on February 20th. That said, on a relative basis, equity volatility was still fairly elevated, with the Cboe Volatility Index (VIX) trending downward, but resting above the 19 level.⁶ Now, with a war breaking out in the Middle East promoting uncertainty and the potential for higher inflation, volatility may well remain elevated still, which ought to continue spurring option premiums.

  Covered Call & Growth ETFs

• Relative to the January 16th, 2026 roll date, all four of the covered call & growth strategies that Global X operates on the major domestic equity indices experienced a decline in option premiums on February 20th, 2026. This took place despite volatility indices that characterize the price movements of the S&P 500®, Nasdaq-100®, Russell 2000, and Dow Jones Industrial Average® all closing higher. Much of this could be attributed to the trajectory of such volatility metrics and changing market sentiments. For example, on January 16th the Cboe Volatility Index (VIX) closed at 14.54, versus February 20th when it closed at 17.14.⁷ However, in the days leading up to these transaction dates, the VIX expressed very different directional moves. In January, it had been trending up off the 13.47 low that it established on December 24th, 2025.⁸ In February, it was in the process of stepping down off a 21.20 level that was recorded on February 16th.⁹ Demand for call options was also much less favorable on February 20th, when the Cboe Equity Put/Call Ratio, exhibiting an upward trend, ultimately ended up sitting at 0.64.¹⁰ This compares to the downward trend it was expressing heading into the January 16th roll, when it finally rested at 0.46.¹¹ The difference in demand for call and put options from one month to the other was material, and the end result was softer month-over-month premium values received by these funds.
• Following a 30%+ decline in value that bitcoin exhibited from October 6th to November 21st, 2025, the cryptocurrency took another material step back in value from January 16th, 2026 to February 20th, 2026.¹² Over that time, the Global X Bitcoin Covered Call ETF (BCCC) took in weekly call premiums totaling 7.85%, supporting 3.73% in outperformance relative to the Coin Metrics’ CMBI Bitcoin Index on a net asset value basis.¹³ BCCC and the index lost 25.18% and 28.91% of their value, respectively.
• From January 16th, 2026 to February 20th, 2026, the yield on a generic 20-year treasury security fell 12 basis points, to 4.67%.¹⁴ This momentum was maintained through the end of the month. During the roll, however, it supported the Global X Treasury Bond Enhanced Income ETF (TLTX) expressing a total return of 1.98%, on a net asset value basis. Year to date, through February 20th, the fund was up 2.61%, outperforming the Bloomberg U.S. Aggregate Total Return Index, which was up 1.20% over that time frame.¹⁵ 

Income Edge^SM ETFs

• On February 17th, 2026, Global X launched the Global X U.S. 500 Income Edge^SM ETF (EDGX) and the Global X Nasdaq-100® Income Edge^SM ETF (EDGQ). These are funds that are designed to utilize weekly call writing strategies to pursue an annualized distribution rate, while aiming to provide investors with a means of price volatility mitigation and potential upside capture for a portion of their portfolio. EDGX operates its strategy on the Solactive GBS United States 500 Index, while EDGQ operates its strategy on the Nasdaq-100®. The former pursues a 9% annualized distribution rate, while the latter pursues a 13% distribution rate, with the difference stemming from the measure of underlying volatility that each of the fund’s reference assets tends to express. While moneyness may vary, both EDGX and EDGQ expect to write weekly call options that are positioned at- or near-the-money on whatever measure of notional value of their portfolio the portfolio managers believe is necessary to garner a premium that will fall in line with this annualized distribution rate target. The balance of the portfolio is left deliberately uncovered so that investors may capture a measure of upside should the funds’ reference assets experience an advance in value.
• Rolling their options on a weekly basis, EDGX and EDGQ collected premiums of 0.16% and 0.23%, respectively, on February 20th, 2026. This reflects consideration of the funds’ distribution policies, which generally will see them distribute 100% of the call option premiums that they collect on a weekly basis. Ensuing performance metrics fall outside the purview of this month’s report, which reflects the January 16th, 2026 to February 20th, 2026 monthly roll schedule that is operated by Global X’s 100% Covered Call strategies. Any measure of premium collection was likely pivotal, however, as U.S. markets have proceeded to trend negatively since the February roll period commenced.
• At the onset of EDGX and EDGQ’s initial roll period, which ran from February 20th, 2026 to February 27th, 2026, the declining nature of market volatility was cause for the funds to express elevated coverage ratios relative to the 25% average that we expect over the long term. With expectations to ebb and flow over time, these coverage ratios reflect the volatility backdrop and expectations around premium collection. The weekly roll frequency allows management to remain nimble and retain as much upside potential as is deemed feasible in widely oscillating markets.

The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. Performance current to the most recent quarter- and month-end is available at XYLD, QYLD, RYLD, DJIA, BCCC, TLTX.