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

March 2025 Covered Call Report – Key Takeaways

• Positive earnings surprises continued to pour in for many S&P 500 constituents during the February roll period for the Global X suite of covered call products, which stretched from January 17th to February 21st.¹ However, the index only delivered a total return of 0.40% during the term.² The result reflects a drawdown that took place to start the period, after investors called into question the merit behind the level of investment that many megacap names were putting forth to support their positions within the AI ecosystem. Thereafter, rising concerns over the path of inflation, spurred by a hotter-than-expected January Consumer Price Index (CPI) reading, and uncertainty surrounding the potential impact of tariffs to be implemented on U.S. imports, created a similarly tentative sentiment.³
• Although the tepid growth that was exhibited by major domestic equity indices during the February period suggested more of a “risk-off” attitude from the community, implied market volatility softened with relative consistency over the period’s final three-week stretch.⁴ In conjunction with softer interest rates, which generally share a positive correlation with call option premiums, this had a negative impact on the premium collection capabilities of the broader suite. Only as the period neared its close did the lowest reading of the Michigan Consumer Sentiment Index since November of 2023 implore investors to sell off equities, the lingering impact of which may promote supplemental volatility in March.⁵
• While it might have taken some time before the aforementioned concerns surrounding corporate investments, inflation, and international trade would grow to the point that they would influence broad market volatility, specific verticals, such as the midstream oil space, were quick to see investors defer commitments. This is because a portion of the value tied to domestic MLPs stems from the long-term energy demand story implied by the expansion of AI technology. Moreover, the oil that presently flows through many domestic midstream pipelines comes from Canada, where tariff implications are material. The end result was The Global X MLP & Energy Infrastructure Covered Call ETF (MLPD) reporting its strongest premium value since its May 2024 inception of 2.71%.