This Oil ETN Pays a 21% Yield. Most Investors Don’t Realize It’s Not an ETF.

1 day ago 1

John Seetoo

Sun, April 26, 2026 astatine 2:47 PM CDT 5 min read

UBS ETRACS Crude Oil Covered Call ETN (USOI) yields 21.08% by penning covered calls connected United States Oil Fund (USO) positions, but this strategy caps upside gains during volatile lipid markets; UBS has taken connected heightened recognition hazard aft its Credit Suisse acquisition, expanding its equilibrium expanse to $1.7 trillion—nearly treble Switzerland’s GDP.
Oil marketplace volatility from the Iran War and US blockade of the Strait of Hormuz creates charismatic trading conditions, but erstwhile hostilities extremity and the strait reopens, lipid prices volition stabilize and covered telephone dividends volition shrink proportionally.
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In conscionable a fewer weeks, the Iran War has triggered tremendous volatility into the lipid markets. With lipid futures prices ranging this twelvemonth betwixt the mid $50s per tube to implicit $112, the intraday volatility has made futures trading a precise charismatic proposition. The existent US blockade of the Strait of Hormuz to compel Iran to springiness up its means to make atomic weapons is preventing immoderate exports of Iranian Oil.

The UBS ETRACS Crude Oil Covered Call ETN (NASDAQ: USOI) is an Exchange Traded Note issued by UBS. It’s delivering a 21.08% output astatine the clip of this writing, but it’s often mistaken for an ETF, and that’s wherever the favoritism tin go problematic for some.

A high-angle changeable of a woody array featuring 2 miniature brownish lipid derricks placed connected a satellite map. A achromatic smartphone successful the foreground displays a banal marketplace app with a red, downward-trending graph and antagonistic percentages. A achromatic java mug, a bluish pen, and speechmaking glasses are besides disposable connected the map. A model with brushed earthy airy is successful the background.

USOI yields are derived from covered calls written against USO and its portfolio of crude oil, earthy gas, gasoline, and different hydrocarbon futures holdings.

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USOI is an ETN issued retired of the UBS AG London Branch. It is simply a enactment issued successful April, 2017 that is acceptable to mature successful April 2037. Its portfolio holds shares successful United States Oil Fund, LP (NYSE: USO), which invests successful futures contracts of crude oil, earthy gas, gasoline, and different hydrocarbons. USOI owns shares of USO and generates its 21.08% output via penning covered calls against its USO positions. An overview of USOI is below:

Net Assets	$325.68 million	52-wk Range	$45.83-$60.67
Yield	21.08%	NAV	$57.40
Daily Avg. Volume	146,906 shares	1-Year Return	32.90%
Expense Ratio	0.85%	3-Year Return	11.67%
Payouts	Monthly	5-Year Return	15.95%

While the monthly payout of 21% APY is precise charismatic to income investors, the covered telephone strategy caps monthly upside potential. This volition effect successful USOI lagging down USO, which volition much afloat recognize gains from escalating lipid prices. Conversely, erstwhile the Iran War hostilities person ended and the Strait of Hormuz is reopened, the terms of lipid volition erstwhile again commercialized successful a constrictive range. This means that volatile volition shrink, and the dividends from the covered calls volition diminish proportionately.

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