US-based asset manager REX Shares has launched an exchange-traded fund that bundles leveraged covered-call strategies tied to nine individual stocks, including crypto-linked names Coinbase and Strategy, into a single income-focused product trading under the ticker GIF.
According to Thursday’s announcement, the fund holds equal-weighted positions in REX’s existing single-stock Growth & Income ETFs, each of which targets about 1.25x exposure to its underlying equity while writing covered calls on a portion of the portfolio to generate option premium income.
GIF trades on Cboe Global Markets and each underlying ETF seeks to distribute income on a weekly basis, with payouts largely derived from covered call premiums.
Covered call premiums are the upfront payments a fund collects for selling options on stocks it already owns, generating income in exchange for capping some of the shares’ upside potential.
REX Shares said the ETF holds equal-weighted exposure to nine REX funds tied to Nvidia (NVII), Tesla (TSII), Strategy (MSII), Coinbase (COII), Robinhood (HOII), Palantir (PLTI), CoreWeave (CWII), Eli Lilly (LLII) and Walmart (WMTI), spanning crypto-linked equities, technology, AI, healthcare and retail sectors.
Related: Michael Saylor says quantum threat to Bitcoin is more than 10 years away
21Shares lists STRC ETP as companies add Strategy preferred shares to treasuries
The launch comes amid a week of new allocations tied to Strategy-linked securities.
On Wednesday, 21Shares introduced an exchange-traded product (ETP) giving European investors exposure to STRC, Strategy’s variable-rate perpetual preferred stock. The 21Shares Strategy Yield ETP began trading on Euronext Amsterdam under the ticker STRC NA on Thursday.
Also on Wednesday, Strategy said Prevalon Energy, an energy infrastructure company, and Anchorage Digital, a crypto-focused digital asset bank, had allocated portions of their corporate treasuries to STRC, though they did not disclose the size of their positions.
Strategy describes STRC as a digital credit instrument with an 11.25% annual dividend, part of its broader effort to issue fixed-income securities tied to its Bitcoin ($BTC) holdings.
Strategy’s $BTC holdings over time. Source: Bitbo.io
Since adopting its Bitcoin treasury strategy in August 2020, Strategy has become the largest corporate holder of Bitcoin, reporting 717,722 $BTC, or about 3.4% of the fixed 21 million supply.
Despite demand for Strategy-linked securities, the company’s shares have fallen alongside Bitcoin’s price. The stock is down more than 60% over the past six months and about 50% over the past year, according to Yahoo Finance data.
Source: Yahoo Finance
Strategy has also emerged as the most heavily shorted large-cap US stock on Goldman Sachs’ latest ranking, based on short interest relative to market value.
Magazine: Bitcoin’s ‘biggest bull catalyst’ would be Saylor’s liquidation: Santiment founder