ProShares Ultra Bloomberg Crude Oil (UCO) Covered Calls
The ProShares Ultra Bloomberg Crude Oil (UCO) is a leveraged exchange-traded fund that seeks daily investment results corresponding to two times (2x) the daily performance of the Bloomberg Commodity Balanced WTI Crude Oil Index. It uses derivatives like futures contracts to achieve its leveraged objective. Due to the effects of daily compounding, it is designed strictly as a short-term tactical tool for sophisticated investors, not for long-term holding.
You can sell covered calls on ProShares Ultra Bloomberg Crude Oil 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 UCO (prices last updated Fri 4:16 PM ET):
| ProShares Ultra Bloomberg Crude Oil (UCO) Stock Quote | ||||||
|---|---|---|---|---|---|---|
| Last | Change | Bid | Ask | Volume | P/E | Market Cap |
| 42.06 | +1.16 | 42.10 | 42.18 | 7.8M | - | 1.4 |
| Covered Calls For ProShares Ultra Bloomberg Crude Oil (UCO) | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Net Debit | Return If Flat |
Annualized Return If Flat |
|
| Apr 17 | 42 | 4.90 | 37.28 | 12.7% | 211% | |
| May 15 | 42 | 7.00 | 35.18 | 19.4% | 142% | |
| Subscribers get access to the full covered call chain, and more features. | ||||||
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Core Business and Products
The ProShares Ultra Bloomberg Crude Oil (UCO) provides 2x daily leveraged exposure to the price of West Texas Intermediate (WTI) crude oil. UCO achieves its goal by investing in a portfolio of oil futures contracts rather than holding physical oil. This structure allows traders to magnify their exposure to daily oil price movements without navigating the logistical complexities of physical storage.
Due to the effects of "contango" and "backwardation" in oil futures markets, along with daily rebalancing, the fund’s performance can diverge significantly from the spot price of oil over time. Consequently, UCO is engineered for intraday or short-term tactical trading rather than as a buy-and-hold energy investment. It is a highly volatile instrument used by active traders to speculate on or hedge against short-term energy volatility.
Competitive Landscape
UCO competes within the active leveraged energy trading space, specifically against geared products like the ProShares UltraShort Bloomberg Crude Oil. It also competes with broader energy ETFs providing 1x exposure, such as the United States Oil Fund. Because UCO is liquid and optionable, it is a preferred vehicle for traders looking to express a strong directional view on WTI crude over a short timeframe.
The fund requires a sophisticated understanding of futures-based ETFs, as the roll yield is a critical factor in performance. Market participants often use UCO alongside other energy-sector tools to manage exposure to geopolitical risk, supply-demand imbalances, and central bank policies that impact global energy prices.
Strategic Outlook and Innovation
The strategic outlook for UCO is entirely dependent on the high-frequency momentum of crude oil prices. As energy markets become increasingly sensitive to global logistics, OPEC+ production decisions, and the transition toward alternative energy, the volatility in crude oil—and the utility of UCO for tactical traders—remains high. Innovation focuses on providing transparent, accessible ways to gain leveraged exposure to complex underlying commodity markets.
Investors utilizing UCO must maintain a disciplined risk-management strategy, as daily 2x leverage resets can lead to rapid capital erosion in volatile, "choppy" market conditions. It remains an evergreen tool for active, short-term tactical engagement with the primary driver of the global energy economy.
| Top 10 Open Interest For Apr 17 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | SLV covered calls | 6. | QQQ covered calls | 1. | REPL covered calls | |
| 2. | EEM covered calls | 7. | GLD covered calls | 2. | BW covered calls | |
| 3. | NVDA covered calls | 8. | HYG covered calls | 3. | PTON covered calls | |
| 4. | KWEB covered calls | 9. | EWZ covered calls | 4. | USO covered calls | |
| 5. | SPY covered calls | 10. | TLT covered calls | 5. | WULF covered calls | |
Want more examples? UCC Covered Calls | UCTT Covered Calls
Risk Disclosure: Trading options involves significant risk and is not suitable for all investors. The information provided on this website is for educational and informational purposes only and does not constitute financial, investment, tax, or legal advice. Nothing contained on this site is an offer to buy or sell, or a solicitation of an offer to buy or sell, any securities or financial instruments.
Covered Call Strategy Risks: While covered call writing is often considered a conservative options strategy, it is not without risk. By selling a covered call, you are limiting your potential upside profit from the underlying stock. You remain exposed to the full downside risk of owning the underlying stock. In the event of a significant decline in the stock price, the premium received may not be sufficient to offset your losses.
No Guarantee of Performance: Past performance is not indicative of future results. Any examples, calculations, or hypothetical scenarios presented on this site are for illustrative purposes only and do not guarantee future returns or outcomes. Market conditions, liquidity, and trading system failures can affect your ability to execute trades at desired prices.
You should consult with a qualified professional advisor and conduct your own due diligence before making any investment decisions. By using this website, you acknowledge that you are responsible for your own investment decisions and agree to release this site and its affiliates from any liability relating to your use of this information. See the OCC's Characteristics and Risks of Standardized Options for more info.
