For investors seeking momentum, Global X Nasdaq 100 Covered Call ETF QYLD is probably on the radar. The fund just hit a 52-week high and has moved up 17% from its 52-week low of $15.91 per share.
Are more gains in store for this ETF? Let us take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed:
QYLD in Focus
Global X Nasdaq 100 Covered Call ETF follows a “covered call” or “buy-write” strategy, in which the fund buys the stocks in the Nasdaq 100 Index and “writes” or “sells” corresponding call options on the same index. It charges 61 bps in fees per year (see: all the Long-Short ETFs here).
Why the Move?
The covered-call strategy has been an area to watch lately as stock volatility surged after the Fed signaled fewer rate cuts for 2025 than projected earlier. A covered call is an investment strategy to generate income and potentially hedge against downside risk. It involves buying a stock or a basket of stocks and then selling or writing call options on those same assets. These options give the buyer the right, but not the obligation, to purchase the stocks at a predetermined price before a specified date.
More Gains Ahead?
QYLD might remain strong, given a weighted alpha of 7.22 and a lower 20-day volatility of 5.59%. There is definitely still some promise for investors who want to ride on this surging ETF.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
