UNL Covered Call Strategy
UNL (United States 12 Month Natural Gas Fund, LP), in the Financial Services sector, (Asset Management industry), listed on AMEX.
United States 12 Month Natural Gas Fund, LP is an exchange traded fund launched and managed by United States Commodity Funds LLC. The fund invests in the commodity markets of the United States. It uses market neutral strategy to create its portfolio. It uses futures contracts to invest in natural gas, crude oil, heating oil, gasoline and other petroleum-based fuels. The fund seeks to track the daily changes in the spot price of natural gas delivered at the Henry Hub, Louisiana, as measured by the changes in the average of the prices of 12 futures contracts on natural gas traded on the NYMEX, consisting of the near month contract to expire and the contracts for the following 11 months, for a total of 12 consecutive months’ contracts, except when the near month contract is within two weeks of expiration, in which case it will be measured by the futures contract that is the next month contract to expire and the contracts for the following 11 consecutive months. United States 12 Month Natural Gas Fund, LP was formed on June 27, 2007 and is domiciled in the United States.
UNL (United States 12 Month Natural Gas Fund, LP) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $8.5M, a beta of 1.24 versus the broader market, a 52-week range of 6.21-9.11, average daily share volume of 87K, a public-listing history dating back to 2010, approximately 128K full-time employees. These structural characteristics shape how UNL etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.24 places UNL roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a covered call on UNL?
A covered call pairs long stock with a short out-of-the-money call, collecting premium and capping upside above the short strike in exchange for income.
Current UNL snapshot
As of June 30, 2026, spot at $6.41, ATM IV 39.00%, IV rank 8.71%, expected move 11.18%. The covered call on UNL below is built from the same end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 17-day expiry.
Why this covered call structure on UNL specifically: UNL IV at 39.00% is on the cheap side of its 1-year range, which means a premium-selling UNL covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 11.18% (roughly $0.72 on the underlying). The 17-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated UNL expiries trade a higher absolute premium for lower per-day decay. Position sizing on UNL should anchor to the underlying notional of $6.41 per share and to the trader's directional view on UNL etf.
UNL covered call setup
The UNL covered call below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With UNL near $6.41, the first option leg uses a $6.73 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed UNL chain at a 17-day expiry; the cross-strike IV skew is reflected directly in the per-leg values rather than approximated. Quantity sizing assumes one contract per option leg (or 100 UNL shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $6.41 | long |
| Sell 1 | Call | $6.73 | N/A |
UNL covered call risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
Max profit equals short-strike minus cost basis plus premium times 100; max loss is cost basis minus premium (at zero). Breakeven is cost basis minus premium.
UNL covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on UNL. Each row is one sampled price point from the computed payoff curve; the full curve uses 200 price points internally before being summarized into 10 rows here.
When traders use covered call on UNL
Covered calls on UNL are an income strategy run on existing UNL etf positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
UNL thesis for this covered call
The market-implied 1-standard-deviation range for UNL extends from approximately $5.69 on the downside to $7.13 on the upside. A UNL covered call collects premium on an existing long UNL position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether UNL will breach that level within the expiration window. Current UNL IV rank near 8.71% sits in the lower third of its 1-year distribution, where IV often re-expands toward the mean; this favors premium-buying structures and disadvantages premium-selling structures on UNL at 39.00%. As a Financial Services name, UNL options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to UNL-specific events.
UNL covered call positions are structurally neutral to slightly bullish; the modeled P&L assumes European-style exercise at expiration and ignores early assignment, transaction costs, dividends paid before expiry on the stock leg (when present), and the bid-ask spread on the listed chain. UNL positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move UNL alongside the broader basket even when UNL-specific fundamentals are unchanged. Short-premium structures like a covered call on UNL carry tail risk when realized volatility exceeds the implied move; review historical UNL earnings reactions and macro stress periods before sizing. Always rebuild the position from current UNL chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on UNL?
- A covered call on UNL is the covered call strategy applied to UNL (etf). The strategy is structurally neutral to slightly bullish: A covered call pairs long stock with a short out-of-the-money call, collecting premium and capping upside above the short strike in exchange for income. With UNL etf trading near $6.41, the strikes shown on this page are snapped to the nearest listed UNL chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are UNL covered call max profit and max loss calculated?
- Max profit equals short-strike minus cost basis plus premium times 100; max loss is cost basis minus premium (at zero). Breakeven is cost basis minus premium. For the UNL covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 39.00%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a UNL covered call?
- The breakeven for the UNL covered call priced on this page is no defined breakeven on the modeled curve at expiration, derived from end-of-day chain premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The current UNL market-implied 1-standard-deviation expected move is approximately 11.18%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a covered call on UNL?
- Covered calls on UNL are an income strategy run on existing UNL etf positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
- How does current UNL implied volatility affect this covered call?
- UNL ATM IV is at 39.00% with IV rank near 8.71%, which is on the low end of its 1-year range. Premium-buying structures (long call, long put, debit spreads) are relatively cheap in this regime; premium-selling structures collect less credit per unit risk.