ProShares UltraPro Dow30 (UDOW) Covered Calls
The ProShares UltraPro Dow30 (UDOW) is a leveraged exchange-traded fund that seeks daily investment results, before fees and expenses, that correspond to three times (3x) the daily performance of the Dow Jones Industrial Average (DJIA). It is designed as a short-term tactical tool for sophisticated traders and is not intended for long-term holding due to the effects of daily compounding.
You can sell covered calls on ProShares UltraPro Dow30 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 UDOW (prices last updated Fri 4:16 PM ET):
| ProShares UltraPro Dow30 (UDOW) Stock Quote | ||||||
|---|---|---|---|---|---|---|
| Last | Change | Bid | Ask | Volume | P/E | Market Cap |
| 46.55 | -2.59 | 46.37 | 46.40 | 7.6M | - | 1.1 |
| Covered Calls For ProShares UltraPro Dow30 (UDOW) | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Net Debit | Return If Flat |
Annualized Return If Flat |
|
| Apr 17 | 45 | 4.10 | 42.30 | 6.4% | 106% | |
| May 15 | 47 | 4.20 | 42.20 | 10.0% | 73.0% | |
| Subscribers get access to the full covered call chain, and more features. | ||||||
Want to make money with covered calls? Sign Up For A Free Trial
Core Business and Products
The ProShares UltraPro Dow30 (UDOW) provides aggressive, leveraged exposure to the Dow Jones Industrial Average. By targeting a 3x daily return, the fund allows traders to amplify their exposure to the performance of the 30 blue-chip companies that comprise the Dow. It achieves this leverage through the use of financial derivatives, including swap agreements, futures contracts, and other instruments.
The fund is structured for active, short-term participation. Because it rebalances its leverage on a daily basis, the fund’s performance over periods longer than one day can deviate significantly from 300% of the DJIA’s total return. This "leverage decay" or "volatility drag" makes it a specialized instrument suited for daily market tactical views rather than long-term strategic core allocations.
Competitive Landscape
UDOW operates in the highly competitive leveraged ETF space. It competes against products like the ProShares Ultra Dow30 (2x leverage) and various inverse equivalents like ProShares UltraPro Short Dow30 (-3x). Investors choose between these based on their specific directional conviction and risk appetite for leverage.
As a highly liquid and optionable security, UDOW is used by traders to express high-conviction views on blue-chip volatility. The availability of options allows for sophisticated "geared" hedging strategies, where investors can potentially offset the high beta of the fund with derivative positions to manage their exposure during major news events or economic announcements.
Strategic Outlook and Innovation
The strategic outlook for UDOW is inherently tied to the short-term sentiment surrounding the Dow Jones Industrial Average. It is a tool for expressing conviction when the market exhibits strong trending behavior. The fund remains a staple for tactical traders who need to magnify their position in the most widely recognized U.S. index without using margin accounts or complex derivatives directly.
Innovation in this space is focused on minimizing the tracking error and borrowing costs associated with maintaining a 3x leveraged position. UDOW remains a specialized, high-risk, high-reward instrument for market participants who understand the nuances of leveraged finance and the mechanical risks of daily rebalancing.
| 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? UDN Covered Calls | UDR 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.
