ENCC:CA: More Downside Than Upside Means A Pass On Covered Calls
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Valkyrie Trading SocietyInvesting Group LeaderFollow5ShareSavePlay(6min)CommentsSummaryGlobal X Canadian Oil And Gas Equity Covered Call ETF (ENCC:CA) focuses on income via dividends and call writing, but still carries downside oil price risk.Venezuelan remains a binary issue: production may ramp quickly or with difficulty, depending on the prospective success of regime change.Canadian oil producers have alright breakeven costs, but macroeconomic malaise and OPEC+ supply dynamics add further downside risk to oil prices.In this high-volatility downside-crude environment, a covered call strategy appears less optimal; straddles or covered puts may be more sensible.Looking for a helping hand in the market? Members of The Value Lab get exclusive ideas and guidance to navigate any climate. Learn More » Abstract Aerial Art/DigitalVision via Getty Images The Global X Canadian Oil And Gas Equity Covered Call ETF (ENCC:CA) implements an options strategy that does well with volatility, but ultimately leaves you on the hook if there is enough ofThis article was written byValkyrie Trading Society5.47K FollowersFollowThe Valkyrie Trading Society is a team of analysts sharing high conviction and obscure developed market ideas that are downside limited and likely to generate non-correlated and outsized returns in the context of the current economic environment and forces. They are long-only investors.They lead the investing group The Value Lab where they offer members a portfolio with real time updates, chat to answer questions 24/7, regular global market news reports, feedback on member stock ideas, new trades monthly, quarterly earnings write-ups, and daily macro opinions.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.