Monthly Covered Call Commentary: August 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 July 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 July roll period. They outline their influence over the option pricing environment and help substantiate changing investor sentiments as characterized by specific market indicators.

View the full report.

August 2025 Covered Call Report – Key Takeaways

• Equity indices like the Nasdaq 100 and S&P 500 received a boost from geopolitical news outlets after a ceasefire agreement between feuding entities in the Middle East was reported on June 24th. It would be followed up on June 27th by the announcement of an agreed-upon framework for a broader trade deal between the U.S. and China containing tariff reductions, purchase agreements, and intellectual property protections that were well-received by the investment community. The pair of major events supported the two indices appreciating 5.76% and 5.26% on a total return basis, respectively, from the start of the Global X Covered Call Suite’s monthly roll period on June 20th through the first week of July.¹

• Over the last two weeks of the Global X Covered Call Suite’s roll period, which ended on July 18th, trade negotiations between the U.S. and its partners in Japan and South Korea moved into the limelight. However, they would fail to completely derail the market’s upward momentum as investors leaned into softer-than-expected Consumer Price Index and Producer Price Index readings for the month of June, which indicated positive price inflation dynamics. Sentiment was further supported by a month-over-month June U.S. retail sales growth figure of 0.6%, which came in ahead of consensus estimates. Finally, the second-quarter earnings season kicked off with 83% of the 60 S&P 500 companies that had reported by July 18th announcing better-than-expected earnings.² The conglomeration of these economic data points supported a risk-on attitude from investors, as exemplified by the Cboe Volatility Index (VIX), which was down 20.42% in the July roll period, to 16.41.³

• As July options expiration approached, not only was volatility being held in check, with the VIX sitting at levels that it hadn’t fallen to since late February. The relative volume of calls to puts was also particularly strong, with S&P 500 risk reversals, denoting the relative price of index puts versus calls, sitting at a near six-month low.⁴ This backdrop had a suppressive influence over call option prices. That said, the Global X Nasdaq 100 Covered Call ETF (QYLD) and the Global X S&P 500 Covered Call ETF (XYLD) still distributed 0.99% and 0.81% of their NAV, respectively.

1. Bloomberg L.P. from June 20^th, 2025 to July 3^rd, 2025.

2. Factset. Earnings Insights, July 18^th, 2025.

3. Bloomberg L.P. Cboe Volatility Index (VIX) from June 20^th, 2025 to July 18^th, 2025.

4. SpotGamma. S&P 500 Options Risk Reversals retrieved July 23^rd, 2025.

The first quarter was marred by reduced expectations for Fed rate cuts, higher Japanese government bond yields, and the Iran war.

The first quarter was marred by reduced expectations for Fed rate cuts, higher Japanese government bond yields, and the Iran war.

Our covered call funds seek to offer alternate sources of income, with different risk/return characteristics. Here, we discuss recent developments.

Our covered call funds seek to offer alternate sources of income, with different risk/return characteristics. Here, we discuss recent developments.