ProShares Ultra MSCI Emerging Markets (EET) Covered Calls

ProShares Ultra MSCI Emerging Markets is an exchange-traded fund that seeks daily investment results corresponding to two times the daily performance of the MSCI Emerging Markets Index. The fund provides leveraged long exposure to a broad range of large and mid-cap companies located in developing nations. It is primarily used by sophisticated investors as a tactical tool to gain magnified bullish exposure to emerging market equities.

You can sell covered calls on ProShares Ultra MSCI Emerging Markets to lower risk and earn monthly income. Born To Sell's covered call screener gives you customized search capabilities across all possible covered calls but here are a couple of examples for EET (prices last updated Fri 4:16 PM ET):

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Core Business and Products

ProShares Ultra MSCI Emerging Markets is a leveraged exchange-traded fund designed to provide double the daily long exposure to the equity markets of developing nations. The fund tracks the MSCI Emerging Markets Index, a widely recognized benchmark that includes approximately 1,200 companies across 24 emerging market countries. To achieve its 2x daily leverage objective, the fund primarily utilizes derivative instruments such as equity index swaps and futures contracts rather than purchasing the underlying stocks in the index directly.

Because the fund rebalances its exposure on a daily basis to maintain its leverage target, it is intended as a short-term tactical instrument for active traders. The effects of daily compounding mean that over longer periods, the fund's performance can vary significantly from exactly two times the return of the benchmark. It is frequently used by investors to express a high-conviction bullish view on global emerging markets or to enhance the return potential of a portfolio during periods of expected international equity strength.

Competitive Landscape

The market for emerging market exposure is highly competitive, featuring a range of long, leveraged, and inverse products. Traders select between these options based on their desired level of risk, liquidity, and the specific geographic focus of the benchmark. Key publicly traded and optionable competitors include:

1. Direxion Daily MSCI Emerging Markets Bull 3X Shares, which provides a higher level of daily leverage at three times the index performance.
2. iShares MSCI Emerging Markets ETF, the primary unleveraged long benchmark used by institutional and retail investors globally.
3. Vanguard FTSE Emerging Markets ETF, a major low-cost competitor that tracks a slightly different set of emerging market securities.
4. Direxion Daily MSCI Emerging Markets Bear 3X Shares, the triple-inverse counterpart used to bet against the same asset class.

Additionally, the fund competes with regional and country-specific leveraged ETFs, such as those focused exclusively on China or Latin America. Market participants often rotate into this fund when they seek broad, diversified exposure to the entire emerging market segment rather than making a single-country bet.

Strategic Outlook and Innovation

The strategic priority for the fund is to maintain precise daily tracking of its leverage target through disciplined derivative management and counterparty diversification. Fund managers focus on optimizing the daily rebalancing process to minimize tracking error and transaction costs, especially during periods of high volatility in international markets. This operational consistency is essential for ensuring the fund remains a reliable tool for professional traders navigating shifts in global macroeconomic sentiment and currency fluctuations.

Future innovation in this category involves the ongoing evaluation of new financial instruments to enhance the liquidity and efficiency of the fund's leveraged positions. As emerging market economies continue to evolve and integrate further into global financial systems, the fund seeks to maintain its relevance by providing efficient access to these growth opportunities. The objective remains to offer a transparent and liquid platform for participants to manage and enhance their international equity exposure, ensuring the fund stays a staple in the tactical asset allocation toolkit.

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