Roll Over Uncertain Oil Prices With Covered Call ETFs

One market ramification of the escalating conflict in the Middle East has been its affect on oil prices. This is partially due to how the war has spread to the Strait of Hormuz, a key waterway in the global oil trade. Currently, the Strait is the site of significant conflict from both sides, effectively blocking any oil tankers from making their way through the choke point. 

Ever since the Strait closed down, oil prices have continued to remain in a volatile position. Prices are barreling around all-time highs, given how no resolution to the conflict remains in sight. Even with the International Energy Agency announcing plans to release 400 million barrels of oil in an effort to balance out prices, markets don’t seem reassured that better days are ahead. 

This volatility may warrant a reconstitution of energy exposure in one’s portfolio. Luckily, the adaptability of the ETF wrapper means that there are plenty of strategies that can offer a potentially more stable take on energy and natural resources investing. 

Covered Calls Provide a Smoother Path to Oil Exposure

As an example, take a closer look at the Amplify Energy & Natural Resources Covered Call ETF (NDIV). NDIV offers a blended approach of both growth and income through the energy and natural resources industries. 

The fund employs the VettaFi Energy and Natural Resources Covered Call Index in order to execute on its investment philosophy. This index takes long equity positions along with short call options to generate robust income while remaining engaged with growth opportunities. 

NDIV’s covered call strategy could prove to be a smoother path forward for sticking with the volatile oil industry. The fund can continue to provide regular income to offset downturns or inflationary pressures. 

Thus far, NDIV has rode into 2026 with potent yield and growth opportunities. As of February 28, 2026, the fund has a distribution rate of 9.99%. Meanwhile, as the chart below illuminates, the fund has year-to-date returns of over 26%.

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VettaFi LLC (“VettaFi”) is the index provider for NDIV, for which it receives an index licensing fee. However, NDIV is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of NDIV.

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