Best Covered Call ETFs for Income Generation
Generate monthly income with covered call ETFs that combine equity exposure with options strategies. Compare yields, analyze performance, and calculate potential returns from top covered call ETFs.
What Are Covered Call ETFs?
Covered call ETFs are exchange-traded funds that generate income by owning a portfolio of stocks and selling call options against those holdings. This strategy can provide regular monthly income while maintaining exposure to potential stock price appreciation up to the call option strike price.
Benefits
- • Regular monthly income distributions
- • Lower volatility than underlying stocks
- • Professional options management
- • Diversified equity exposure
Considerations
- • Limited upside potential in bull markets
- • Income varies with market conditions
- • Options premiums may decline
- • Tax implications of distributions
Popular Covered Call ETFs
Established covered call ETFs with consistent track records and broad market exposure
JEPI
Large Cap Equity + Options
JPMorgan Equity Premium Income ETF
Seeks current income while maintaining prospects for capital appreciation
JEPQ
Tech/Growth + Options
JPMorgan Nasdaq Equity Premium Income ETF
Provides income through equity and options strategy on Nasdaq stocks
QYLD
NASDAQ 100 + Covered Calls
Global X NASDAQ 100 Covered Call ETF
Generates income through covered calls on NASDAQ 100 index
XYLD
S&P 500 + Covered Calls
Global X S&P 500 Covered Call ETF
Income generation through covered calls on S&P 500 index
RYLD
Small Cap + Covered Calls
Global X Russell 2000 Covered Call ETF
Covered call strategy on Russell 2000 small-cap index
High-Yield Covered Call ETFs
Ultra-high yield ETFs using aggressive options strategies - higher risk, higher potential income
Higher Risk Strategy
These ETFs use more aggressive options strategies and may have higher volatility. Distribution yields are not guaranteed and may vary significantly.
MSTY
Single Stock + Options
YieldMax MSTR Option Income Strategy ETF
High-yield options income strategy on MicroStrategy stock
ULTY
Growth Stocks + Options
YieldMax Ultra Option Income Strategy ETF
Ultra-high yield options strategy on growth stocks
TSLY
Tesla + Options
YieldMax TSLA Option Income Strategy ETF
Options income strategy focused on Tesla stock
Browse by Company
Specialized ETF companies focused on income and options strategies
YieldMax ETFs
Ultra-high yield single-stock options strategies
REX Shares ETFs
Innovative income and volatility strategies
Defiance ETFs
Thematic and income-focused strategies
NEOS ETFs
Enhanced income through options overlays
Roundhill ETFs
Sports betting, gaming & entertainment
Covered Call ETF Investment Guide
How to Choose Covered Call ETFs
- •Consider your income needs and risk tolerance
- •Compare distribution yields and consistency
- •Evaluate the underlying equity portfolio
- •Review options strategy and management approach
- •Consider expense ratios and total costs
Tax Considerations
- •Distributions may be taxed as ordinary income
- •Some distributions may qualify as return of capital
- •Consider holding in tax-advantaged accounts
- •Consult tax professionals for specific situations