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  5. SLVO: Would I be correct in concluding that Trump's on again off again tariffs are good for covered call ETF's ? [Credit Suisse X-Links Silver Call ETN IOPV]
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Q: Would I be correct in concluding that Trump's on again off again tariffs are good for covered call ETF's ? When he announces a tariff the market takes a dive. When he backs off the market rises ..... Under those conditions can not the call writers charge a higher premium ? I've noticed GDXY yielding 43% was at 52.9% the previous month. And SLVO is yielding 23.2% . Even the US treasury ETF HPYT is yielding 20% .....Even boring old UMAX a utility covered call ETF is yielding a hair under 16% ..... Do you see a relationship between the amount of the premiums covered call ETF's can get to " Yeah I'm going to tariff the snot out of you " to " Nah, i was just kidding " ..... market swings ?
Basically I'm wondering if Trump is the perfect storm for options .....
Asked by Garth on May 29, 2025
5i Research Answer:

Certainly volatilty of any kind typically increases options premiums and we think the thesis posed in the question has some validity. Because many of the noted ETFs pay out a large portion of return of capital, one still needs to be careful when looking at stated yields vs total returns. SLVO, for example, has an indicated yield of 33.54% but one-year total return of 16.45%. We would also note that the underlying sector asset performance is still going to be the main driver of performance of course, regardless of any option pricing changes. But for these types of funds, volatility can be a benefit. 

Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in GDXY.

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