ETF - Sector
XLE
Energy Select Sector SPDR Fund
Diversified energy sector income from XLE with covered calls and cash secured puts. Oil and gas majors exposure.
Monthly Premium1.5-2.5%
Annualized Return18-30%
Stock Price$88-100
IV RankModerate (35-50)
Options LiquidityExcellent
Dividend Yield3.2%
Why XLE for Covered Calls & Cash Secured Puts?
XLE provides diversified energy exposure with high dividend yield. Less volatile than individual oil stocks. Good for sector allocation.
Example Covered Call Trade
XLECovered Call
Strike Price$100 (6% OTM)
Expiration30 days
Premium$1.80 per share
Return If Flat1.9% ($180)
Return If Called7.9% ($750) + dividend
Keep Probability71% keep shares
Recommended Strategy for XLE
Sell calls 5-7% OTM to capture premium plus dividend. Good energy income alternative.
Risks to Consider
- Oil price dependency
- Energy transition concerns
- Sector concentration
- Dividend cuts in downturns
Analyze XLE Covered Calls Now
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