Monthly Covered Call Commentary: October 2025

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 September 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 September roll period. They outline their influence over the option pricing environment and help substantiate changing investor sentiments as characterized by specific market indicators.

October 2025 Covered Call Report – Key Takeaways

• Relative to the previous roll period for the Global X Covered Call ETF Suite, major domestic equity indices within the United States experienced increasing positive price momentum from August 15th, 2025 to September 19th, 2025.  The bullish behavior was driven by rising expectations for the Federal Reserve’s (“Fed”) first interest rate cut since December of 2024, which gained steam after Fed Chair Jerome Powell made a speech at the August 22nd Jackson Hole Symposium. That speech was followed up by a wealth of economic data that supported the case, not least of which included a 911K negative revision to the Bureau of Labor Statistics’ nonfarm payrolls figure for the twelve months trailing March, 2025.¹ The report denoted that jobs growth had been slowing even before the United States began to implement more-aggressive tariffs on imports from partnering trade nations earlier in 2025, and it sharpened the argument for a rate cut to support spending.
• The environment was supportive of growth, but it ushered in little in terms of equity volatility. In fact, the Cboe Volatility Index (VIX) and the Cboe Nasdaq Volatility Index (VXN) concluded the roll period on September 19th at 15.45 and 18.74, respectively.² The former closed below the 16 level for 80% of the days in the roll period.³ Consequently, QYLD and XYLD received premiums of 1.99% and 1.54%, respectively, in the sale of their call options, with low volatility tempering demand for options.
• One of the consequences of the Fed proceeding to cut interest rates on September 17th is less of an income incentive presented by short-duration treasury instruments. Further, world interest rate probabilities are suggesting that the market is anticipating at least two more rate cuts before the end of the year.⁴ As bonds lost some of their value as a potential source of income, the distributions that can be sourced from covered call option writing on the major domestic equity indices may become more enticing. 12-trailing month distributions on all of Global X’s fully-covered covered call strategies sat in the double-digit vicinity at the end of the third quarter.