A new suite of three exchange-traded funds (ETFs) has been launched, aimed at providing steady monthly income by capitalizing on the volatility of cryptocurrency-related stocks, as noted in a recent announcement.
The ETFs introduced comprise the Coinbase Option Income Strategy ETF (ICOI), Marathon Digital Option Income Strategy ETF (IMRA), and MicroStrategy Option Income Strategy ETF (IMST).
Each fund employs a covered call strategy, focusing on the respective stocks of Coinbase, Marathon Digital, and MicroStrategy.
These funds feature a net expense ratio of 0.98%. Notably, ICOI and IMST also have a gross expense ratio of 0.99%, but fee waivers are in place for both until March 25, 2027.
Overview of the ETF Strategy
Unlike typical passive income products, these ETFs adopt a proactive stance. Fund managers sell out-of-the-money call options while retaining their equity stakes. The premiums acquired from these options are distributed to investors as monthly income.
This approach provides stable returns but has its trade-offs. While it allows investors to benefit from option premiums, it also limits potential gains if the stock price exceeds the option’s strike price. Additionally, investors remain exposed to downside risk related to the overall stock performance.
In light of this, the CEO highlighted that the considerable volatility in the crypto market represents not only a risk but also a significant opportunity for income generation.
He emphasized that producing consistent income from these price fluctuations requires an approach that goes beyond mere formulas. The strategy relies on actively tracking market trends, shifts in investor sentiment, and regulatory changes.
The Head of Alpha Strategies stressed the critical role of precision and timing in executing this approach. He noted that the volatility of stocks such as MSTR, COIN, and MARA creates an optimal setting for generating income.
However, success hinges on maintaining an edge in tracking news cycles, capital movements, and pricing trends in the options sector.
He stated:
“The strategy we’re implementing with IMST, ICOI, and IMRA seeks to deliver investors a blend of monthly income along with significant, albeit limited, exposure to equity growth.”
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