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QYLD vs JEPQ: the whole difference is where the strike sits

QYLD and JEPQ both sell calls on the Nasdaq-100. QYLD sells them right at today's level, on its whole basket. JEPQ sells them above today's level, through notes from banks. That one choice, the strike, decides who keeps a rally and who keeps more in a drop.

Comparison · 7-minute read · Updated 2026-10-28

The short answer

QYLD is Global X's Nasdaq-100 Covered Call ETF. It owns the Nasdaq-100 stocks and sells one-month calls on the index At the money, at or just above today's level, on all or nearly all of what it holds.

JEPQ is J.P. Morgan's Nasdaq Equity Premium Income ETF. It owns Nasdaq-100 stocks picked by a manager and buys notes from banks that sell Nasdaq-100 calls for it, usually Out of the money, a bit above today's level.

At the money collects the biggest premium and keeps none of an up month. Above the money collects less and keeps the first part of a rise. Neither fund is a recommendation to buy or sell. Designs are as of October 2026; check the current pages on Global X's and J.P. Morgan's sites.

Side by side

The strike, in one picture

Picture the index at 100. You sell a call.

• At 100, at the money: you collect the most. Any rise above 100 is the buyer's. You keep none of it.
• At 103, above the money: you collect less. A rise to 103 is yours. Above 103 is the buyer's.

That's the whole trade-off. More premium now, or room to grow. Our covered call at the money guide works it through on one stock. A fund that picks "at the money" every month has made that choice for you, forever.

An up month, a flat month, a down month (hypothetical)

This is a simplified model, not either fund's real numbers or rules, and an illustration, not a trade idea. In it, the calls cover the whole basket, and every dollar of premium is paid out.

Two people each put $10,000 in. One goes into a made-up QYLD-like fund, one into a made-up JEPQ-like fund.

• QYLD-like: calls right at the level, collecting $200 a month.
• JEPQ-like: calls 3% above the level, collecting $120 a month.

Each row starts fresh at $10,000.

QYLD-like wins the flat month and loses less in the drop, thanks to its bigger premium. JEPQ-like wins the up month by more than double. In the drop, both lose almost the whole fall.

Single months hide the real problem, though. Markets don't move in single months. They fall and come back.

The round trip: where at-the-money really costs (hypothetical)

Start again at $10,000 each. The index falls 10% in month 1. Then it climbs 11.1% in month 2, all the way back to where it started.

In month 2, both funds sell new calls at the same rule, on the smaller basket. So the premium is a bit smaller.

The index is even. Both funds are behind. The QYLD-like fund is furthest behind, −$620, even though it collected the most premium: $380 over two months.

Look at month 2. The index climbed $1,000. The QYLD-like fund kept none of it. Its at-the-money call handed every dollar of the recovery to the buyer. The JEPQ-like fund kept $270, the first 3%, and gave the rest away.

Run that pattern for years of ups and downs and you get a fund that takes the falls and misses the bounces. The payouts keep arriving, and the share price wears down underneath them. That's NAV erosion, worked through month by month in why QYLD's price keeps falling.

The JEPQ-like fund doesn't escape it. It's also behind after a round trip. Its strike just leaves more room for the climb back.

What the bigger payout really is

A bigger payout from an at-the-money fund isn't extra return. It's the price of the rally you sold. In a flat market, you keep it all. In a market that falls and recovers, you can pay it back, and then some.

That's why the yield on a quote screen can't settle QYLD vs JEPQ. Compare the Total return, price plus payouts, over several years, against the plain Nasdaq-100. For what the headline yield counts and what it doesn't, see distribution rate vs SEC yield.

Doing it yourself, the strike is yours to pick each month. After a drop, you could sell well above your cost, or not sell at all. That choice is at the centre of the wheel strategy. For how these two designs sit next to JEPI and the YieldMax funds, see how covered call ETFs work and JEPI vs JEPQ.

Canadian readers: both are US-listed. In a TFSA, part of the payout can be lost to US withholding tax; see US covered call ETFs in a TFSA.

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