QYLD Explained: A Beginner’s Guide to Monthly Income


Are you new to the investing world, searching for an investment that can offer potential monthly income while you learn the ropes? Look no further than the Global X NASDAQ 100 Covered Call ETF, commonly known by its ticker symbol, QYLD. This beginner-friendly blog post will explain what QYLD is, how it works, and why it might be an attractive option for those seeking to add an income-generating asset to their portfolio.

What is QYLD?

QYLD is an exchange-traded fund (ETF) that follows a “covered call” strategy on the NASDAQ 100 Index. The NASDAQ 100 comprises 100 of the largest non-financial companies listed on the NASDAQ stock exchange and includes tech giants like Apple and Google. A covered call is an options strategy where an investor holds a long position in an asset and sells call options on that same asset to generate an income stream from the option premiums.

How Does QYLD Work?

QYLD’s strategy involves owning shares of the NASDAQ 100 stocks and then regularly selling call options against that stock portfolio. When an investor sells a call option, they are giving the buyer the right, but not the obligation, to purchase the stock from them at a specified price, known as the strike price, within a certain period. In return for selling this right, the seller receives a premium, which is a source of income.

Why Consider QYLD for Your Portfolio?

  1. Income Generation: QYLD aims to provide investors with monthly distributions from the premiums earned through the covered call strategy.
  2. Potential for Lower Volatility: By generating income from option premiums, QYLD can potentially offer a smoother ride than just owning the stocks outright, as the income can offset some of the portfolio’s losses during market downturns.
  3. Simplicity: For beginners, QYLD offers a way to partake in a sophisticated options strategy without having to make individual trades themselves.

Considerations Before Investing in QYLD

  • Cap on Upside Potential: Since you’re selling the right to buy your stock at a certain price, if the market soars, you’ll miss out on some of the gains beyond the strike price of the calls you’ve sold.
  • Tax Implications: The income generated from option premiums can be taxed as ordinary income, which may be at a higher rate than long-term capital gains.
  • Market Risk: Like any investment in equities, QYLD carries market risk, including the loss of principal.


QYLD can be a welcome addition to a diversified investment strategy, especially for beginners looking for monthly income potential. It allows investors to tap into the options market with the ease of buying a single ETF. As with any investment, it’s crucial to do your research and consider your financial goals, risk tolerance, and investment horizon before adding QYLD to your portfolio.

Remember, investing is not just about growing wealth; it’s also about understanding the tools at your disposal and using them wisely to achieve your financial objectives. QYLD presents one such tool, offering a blend of income potential and exposure to some of the most innovative companies in the tech sector.

NOTE: I am NOT a financial advisor.

Before making any investment, it’s crucial to consider factors like your risk tolerance, investment goals, and the current market environment. These examples are for informational purposes only and should not be considered as a specific investment recommendation.

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