New ETF offers income potential through covered call strategies on leading cryptocurrency-related stocks.
Innovative ETF for Crypto Income
REX Financial has unveiled a new exchange-traded fund designed to generate income via options on cryptocurrency stocks. Announced on September 18, the REX Crypto Equity Premium Income ETF employs a covered call strategy, holding a portfolio of 25 crypto-related stocks and earning premiums from out-of-the-money call options.
Composition and Target Companies
The ETF includes stocks in the BITA Crypto Assets & Digital Payments Index. This index tracks companies focused on crypto mining, trading, blockchain development, custody solutions, and digital payments. REX CEO Greg King emphasized the transformative role of crypto in financial ecosystems, stating that the ETF targets the most innovative firms within the sector.
Covered Call Strategy Explained
A covered call involves selling call options on owned assets, offering upfront income from premiums while capping potential upside gains. This strategy aligns with REX’s approach, which has proven successful with its Nasdaq and artificial intelligence-focused ETFs.
Crypto Index Performance Boost
The BITA index, underlying the new ETF, has seen over 80% growth this year, driven by a post-election surge in crypto-related stocks. Industry experts note that the U.S. presidential election outcome could foster a more favorable regulatory environment for crypto.
Growing Momentum for Crypto ETFs
The launch reflects a broader trend of increasing crypto ETF options. U.S. regulators appear more open to these products, with several proposed crypto index ETFs awaiting approval. Analysts suggest these funds could drive further innovation in the ETF space, including potential Ethereum staking yield features.
Disclaimer:
The information provided on 13Desk is for informational purposes only and should not be considered financial advice. We strongly recommend conducting your own research and consulting with a qualified financial advisor before making any investment decisions. Investing in cryptocurrencies carries risks, and you should only invest what you can afford to lose. 13Desk is not responsible for any financial losses incurred from your investment activities.
