Covered calls on XLE
Energy Select Sector SPDR Fund was trading at $59.15 when this page was last refreshed on August 3, 2026. 15 out-of-the-money XLE calls sat in the 0.15 to 0.25 delta band that covered call writers work in, paying $32 to $62 a contract. None of them cleared the confidence bar.
Numbers on this page come from a snapshot taken on August 3, 2026. They are not live quotes and are not refreshed when you load the page.
| Expiry | Strike | Bid / ask | Premium | Annualized | Keep odds | Break-even | OI |
|---|---|---|---|---|---|---|---|
| August 14 11d | $61.50 | $0.27 / $0.36 | $32 | 17.7% | 81% | $61.82 | 23 |
| August 21 18d | $62.00 | $0.39 / $0.45 | $42 | 14.4% | 79% | $62.42 | 27,426 |
| August 28 25d | $63.00 | $0.37 / $0.49 | $43 | 10.6% | 81% | $63.43 | 91 |
| September 4 32d | $63.50 | $0.44 / $0.55 | $50 | 9.6% | 81% | $64.00 | 88 |
| September 11 39d | $63.50 | $0.55 / $0.69 | $62 | 9.8% | 79% | $64.12 | 0 |
One row per expiration: the out-of-the-money strike closest to the middle of the delta band, which is the strike you would actually be looking at on that expiry. Break-even on a covered call is your own cost basis minus the premium, not the strike minus the premium, so the column above is the strike-side break-even and yours depends on what you paid for the shares.
What the premium is priced off
25% at the money is a normal tape for XLE. The premium is fair, not generous.
Can you actually get filled
Median bid-ask spread is 22.6% of the mid. That is wide. On a 60 cent contract you are giving up real money the moment you cross, and the widest strike in this ladder sits at 28.6%. Open interest is thin, 88 contracts at the median strike. You can get into a position like that far more easily than you can get out of it. 2 expiries in this ladder have almost no open interest at all (August 14, September 11), and a strike nobody else holds is a strike you will be negotiating your way out of alone.
Dates that matter in this window
XLE is a fund, so there is no earnings date to sell into. That removes the single largest gap risk a premium seller faces, and it is most of the reason funds are easier to write against than the names inside them. The stock pays about 3.2% a year, and no ex-dividend date was confirmed inside this window.
What the annualized column hides
The best annualized number in this ladder is 17.7%, on the $61.50 strike expiring August 14. It is $32 of actual cash. It annualizes well because it is an 11-day contract, and annualizing a two-week trade assumes you find twenty-six more like it, at the same premium, with the same risk. You will not.
If it gets called away
Take the $63.50 strike expiring September 4. You collect $50 up front. If XLE finishes above $63.50 your 100 shares are sold there, and the 7.4% move from $59.15 up to the strike is yours as well. Everything above it is not. The model puts the odds of keeping the premium without being assigned at about 81%, which is the whole point of writing that far out.
The number nobody checks is the cost basis. If you paid more than $63.50 for these shares, that strike locks in a loss on the stock, and $50 of premium does not repair it. A covered call is only a good trade at a strike you would genuinely accept selling at.
Questions people actually ask
What is a good strike for a covered call on XLE?
The strikes above are the ones in the 0.15 to 0.25 delta band, which is where premium sellers targeting roughly an 80% chance of keeping the premium tend to sit. On the August 3, 2026 snapshot that meant $61.50 out to $63.50, depending on how far out you go. The right one for you is the lowest strike you would still be happy selling your shares at.
How much can you make selling covered calls on XLE?
The best annualized figure in the ladder above was 17.7%, and the cash it represents was $32 for one contract. Annualized numbers assume you repeat the trade all year at the same premium, which nobody does. Treat them as a way to compare expiries, not as a forecast.
Does OptionsKing recommend selling calls on XLE?
No. This page is a dated snapshot of the chain, not a recommendation, and the app itself said nothing on this ticker cleared its 75 confidence bar at the last refresh. See how the confidence gate works and the full disclaimer.
Read this as a snapshot, not a suggestion. It is where the XLE chain stood on August 3, 2026, and every price in it has already changed.