Roundhill Covered Call Strategy Launches Bitcoin ETF
Roundhill Investments has launched its own Bitcoin ETF, known as YBTC. The ETF is actively managed and aims to mirror the dynamics of Bitcoin by investing in the ProShares Bitcoin Strategy ETF (BITO). One of the key strategies employed by YBTC is selling out-of-the-money call options on BITO, which creates additional income while capping the upside potential of Bitcoin’s price movements.
How Does the OTM Call Strategy Work?
In this strategy, call options are sold on the Bitcoin ETF with strike prices set above the current market price. When these out-of-the-money call options are sold, YBTC collects premiums from buyers, generating additional income for the fund. This covered call strategy allows investors to participate in Bitcoin’s price fluctuations while providing a consistent monthly income.
Providing a Means to Engage with Bitcoin
The primary objective of YBTC is to provide investors with a way to engage with Bitcoin and generate a consistent monthly income. By implementing the covered call strategy on Bitcoin ETFs, YBTC aims to distribute returns on a monthly basis while capping potential gains.
Hot Take: Roundhill Investments Launches Bitcoin ETF with Covered Call Strategy
Roundhill Investments has entered the Bitcoin ETF market with its launch of YBTC. This actively managed fund employs a covered call strategy, selling out-of-the-money call options on the ProShares Bitcoin Strategy ETF. By doing so, YBTC aims to generate additional income while limiting potential gains. This approach provides investors with an opportunity to engage with Bitcoin’s price movements while receiving a consistent monthly income. It will be interesting to see how this new entrant performs in the growing landscape of cryptocurrency investment products.
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