State Street SPDR S&P Semiconductor ETF (XSD) Covered Calls

The SPDR S&P Semiconductor ETF (XSD) is an exchange-traded fund that tracks the S&P Semiconductor Select Industry Index. It provides equal-weighted exposure to the U.S. semiconductor sector, including companies involved in chip design, manufacturing, and equipment. By using a modified equal-weighting methodology, the fund offers a diversified approach that includes large-cap leaders as well as growth-oriented small- and mid-cap firms across the semiconductor landscape.

You can sell covered calls on State Street SPDR S&P Semiconductor ETF to lower risk and earn monthly income. Born To Sell's covered call screener gives you customized search capabilities across all possible covered calls but here are a couple of examples for XSD (prices last updated Tue 4:16 PM ET):

State Street SPDR S&P Semiconductor ETF (XSD) Stock Quote
Last Change Bid Ask Volume P/E Market Cap
360.07 -2.47 357.25 365.48 26K - 1.5
Covered Calls For State Street SPDR S&P Semiconductor ETF (XSD)
Expiration Strike Call Bid Net Debit Return
If Flat		 Annualized
Return If Flat
Feb 20 360 4.90 360.58 -0.2% -18.3%
Mar 20 360 18.30 347.18 3.7% 42.2%
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The SPDR S&P Semiconductor ETF (XSD) is a specialized investment vehicle designed to provide broad exposure to the United States semiconductor industry. Unlike market-cap-weighted funds that may be dominated by a few massive firms, XSD utilizes a modified equal-weighting strategy. This approach ensures that smaller, high-growth semiconductor companies have a meaningful impact on the fund performance alongside industry giants.

The fund core objective is to replicate the performance of the S&P Semiconductor Select Industry Index. This index covers various sub-sectors of the semiconductor market, including:

  1. Design and Fabrication: Companies focused on the architecture and physical creation of integrated circuits.
  2. Semiconductor Equipment: Firms that provide the complex machinery required to manufacture high-tech chips.
  3. Specialized Applications: Exposure to companies producing chips for artificial intelligence, automotive electronics, and 5G infrastructure.

Competitive Landscape

XSD competes with other sector-specific semiconductor ETFs for investor capital. Its primary rivals include the VanEck Semiconductor ETF and the iShares Semiconductor ETF. While these competitors are often market-cap-weighted—giving significant influence to mega-cap stocks like NVIDIA—XSD provides a more balanced exposure across the entire industry. Other notable alternatives in the technology space include the Invesco Semiconductors ETF and broader tech funds like Vanguard Information Technology ETF.

Strategic Outlook and Innovation

The semiconductor industry remains a fundamental pillar of the global digital economy. The fund is positioned to benefit from long-term structural shifts, such as the massive expansion of high-performance computing required for generative artificial intelligence. Innovation in power semiconductors for electric vehicles and the continued miniaturization of processing units drive the underlying holdings. By maintaining a diversified, equal-weighted portfolio, the fund seeks to capture the rapid innovation cycles typical of mid-sized firms that may eventually become the next generation of industry leaders.