Monthly Covered Call Commentary: September 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 August 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 August 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.

September 2025 Covered Call Report – Key Takeaways

• In the roll period stretching from July 18th, 2025, to August 15th, 2025, for the Global X covered call product suite, volatility trended negatively across all four of the major domestic equity indices.¹ The Cboe Volatility Index (VIX) spiked to about 21.8 on August 1st, reflecting a July-period U.S. Nonfarm Payrolls report that was released by the Bureau of Labor Statistics featuring 73,000 jobs added versus an expected 114,000.² However, after remaining above the 17 level for the ensuing two business days, the VIX then continued fall as investors weighed the possibility of a September rate cut and digested a softer-than-expected Consumer Price Index (CPI) report.

• The two funds that did not experience a premium increase were the Global X Nasdaq 100 Covered Call & Growth ETF (QYLG), which still delivered a flat distribution, and the Global X Information Technology Covered Call & Growth ETF (TYLG), which witnessed a 20%+ peak-to-trough decline in volatility for its reference asset from August 1st through August 14th.³ Elsewhere, soft volatility metrics failed to have more of a suppressive impact on premiums acquired, and the Global X Nasdaq 100 Covered Call ETF (QYLD), in particular, distributed up to its 1% cap for the fifth time in the last six roll periods dating back to March 2025.

• Discounting the positively received CPI report that contributed to a 1.1% advance for the S&P 500 upon its release on August 12th, long equity investors have recently seen support from solid corporate earnings, better-than-expected second quarter GDP, and rising expectations of an interest rate cut by the Federal Reserve Board (FED) at its September 17th meeting.⁴ It has created a foundation that may allow the markets to absorb any inflation-oriented economic data points that could support the contrarian bearish narrative over the next month. The employment backdrop is something that investors will likely keep under a microscope. However, there seemingly few market events that otherwise exist, at least on the economic calendar between now and the FED meeting, that could elicit material market volatility, in our view.

1. Bloomberg L.P. Cboe Volatility Index (VIX), Cboe Nasdaq 100 Volatility Index (VXN), Cboe Russell 2000 Volatility Index (RVX), and Cboe Dow Jones Industrial Average Volatility Index (VXD).

2. Bureau of Labor Statistics July Nonfarm Payrolls Report.

3. Technology Select Sector SPDR ETF Implied Volatility from August 1^st, 2025 to August 14^th, 2025. Implied volatility determined by Bloomberg’s LIVE engine and 30 Day IVOL at 100% Moneyness LIVE function.

4. Bloomberg L.P. S&P 500 Total Return on August 12^th, 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.