Standard and Poor's launches GSCI Covered Call Select index

By Melissa Kory

Cleveland, Oct. 7 - Standard & Poor's announced the launch of the S&P GSCI Covered Call Select index to simulate a covered call strategy on commodities within the S&P GSCI that have active options markets.

"The S&P GSCI Covered Call Select index is part of the next generation of the S&P GSCI family of indices," Michael G. McGlone, senior director of commodity indexing at S&P indices, said in a news release.

"It is designed to target lower volatility exposure to commodities, alleviate some of the potential drag on returns from rolling into contango and seek potential income in a very low fixed rate income environment."

There are 10 commodities included in the 2010 S&P GSCI Covered Call Select index: coffee, corn, cotton, crude oil, gold, natural gas, silver, soybeans, sugar and wheat.

Each commodity has a separate covered call index, reflecting an investment in the rolling active futures contract and the systematic selling of out-of-the-money calls. The 10 indexes are included in a composite index on an equal-weighted basis.

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