YBTC is the first U.S. ETF to implement a covered call strategy on bitcoin*, allowing investors to participate in upside exposure to bitcoin* while potentially generating monthly options income.
NEW YORK, Jan. 18, 2024 /PRNewswire/ — Roundhill Investments, an ETF sponsor focused on innovative financial products, is pleased to announce the launch of the Roundhill Bitcoin Covered Call Strategy ETF (YBTC), which begins trading on Cboe BZX today. YBTC is the first bitcoin covered call strategy ETF to list in the U.S.
YBTC seeks to offer investors exposure to bitcoin*, the world’s largest cryptocurrency by market capitalization. The Fund employs a covered call strategy on bitcoin ETFs, designed to generate monthly income while providing investors with exposure to the price movements of bitcoin (subject to an upside cap). Historically, bitcoin has exhibited significant volatility, which may allow for the Fund to generate significant options income from its call selling strategy. In turn, the Fund seeks to provide current income to shareholders.
Similar to gold, bitcoin stands out as an asset that does not yield operating profits or cash flows, presenting a unique challenge for income-focused investors. Traditionally, this gap has led to the popularity of on-chain strategies such as staking for crypto assets like Ether. Meanwhile, YBTC overlays a covered call strategy on bitcoin to allow for investors to retain upside to bitcoin while addressing needs for current income.
“YBTC offers investors an attractive blend of high income potential and exposure to bitcoin,” said Dave Mazza, Chief Strategy Officer at Roundhill Investments. “Investors have clamored for a covered call ETF with exposure to bitcoin and we are proud to be the first to bring such a product to the U.S. market.”
YBTC seeks to pay distributions, if any, on a monthly basis.
* The fund does not invest in bitcoin directly; it seeks to provide exposure to the price return of an exchange-traded fund that invests principally in bitcoin futures contracts (the “Bitcoin Futures ETF”). The fund is not suitable for all investors and involves a high degree of risk.
About Roundhill Investments:
Roundhill Investments is a registered investment adviser focused on offering innovative financial products designed to offer exposure to investment themes that appeal to the next generation of investors. To learn more about the company, please visit roundhillinvestments.com.
Investors should consider the investment objectives, risk, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the ETF please call 1-877-220-7649 or visit the website at https:// www.roundhillinvestments.com/etf/. Read the prospectus or summary prospectus carefully before investing.
All investing involves risk, including the risk of loss of principal. There is no guarantee the investment strategy will be successful. The fund faces numerous risks, including options risk, liquidity risk, market risk, cost of futures investment risk, clearing broker risk, commodity regulatory risk, futures contract risk, active management risk, active market risk, clearing broker risk, credit risk, derivatives risk, legislation and litigation risk, operational risk, trading issues risk, valuation risk and non-diversification risk. For a detailed list of fund risks see the prospectus.
Covered Call Strategy Risk. A covered call strategy involves writing (selling) covered call options in return for the receipt of premiums. The seller of the option gives up the opportunity to benefit from price increases in the underlying instrument above the exercise price of the options, but continues to bear the risk of underlying instrument price declines. The premiums received from the options may not be sufficient to offset any losses sustained from underlying instrument price declines, over time. As a result, the risks associated with writing covered call options may be similar to the risks associated with writing put options. Exchanges may suspend the trading of options during periods of abnormal market volatility. Suspension of trading may mean that an option seller is unable to sell options at a time that may be desirable or advantageous to do. Bitcoin Futures ETF Risks. The Fund will have significant exposure to the Bitcoin Futures ETF through its options positions that utilize the Bitcoin Futures ETF as the reference asset. Accordingly, the Fund will subject to the risks of the Bitcoin Futures ETF, set forth below. Bitcoin Risk. Bitcoin is a relatively new innovation and the market for bitcoin is subject to rapid price swings, changes and uncertainty. The further development of the Bitcoin network and the acceptance and use of bitcoin are subject to a variety of factors that are difficult to evaluate. The slowing, stopping or reversing of the development of the Bitcoin network or the acceptance of bitcoin may adversely affect the price of bitcoin. Bitcoin is subject to the risk of fraud, theft, manipulation or security failures, operational or other problems that impact the digital asset trading venues on which bitcoin trades. The Bitcoin blockchain may contain flaws that can be exploited by hackers. A significant portion of bitcoin is held by a small number of holders sometimes referred to as “whales.” Transactions of these holders may influence the price of bitcoin. Digital Asset Industry Risk. The digital asset industry is a new, speculative, and still-developing industry that faces many risks. In this emerging environment, events that are not directly related to the security or utility of the Ethereum blockchain or the Bitcoin blockchain can nonetheless precipitate a significant decline in the price of ether and bitcoin. Digital Asset Regulatory Risk. Digital asset markets in the U.S. exist in a state of regulatory uncertainty, and adverse legislative or regulatory developments could significantly harm the value of bitcoin futures contracts or the Bitcoin Futures ETF’s share, such as by banning, restricting or imposing onerous conditions or prohibitions on the use of bitcoin, mining activity, digital wallets, the provision of services related to trading and custodying digital assets, the operation of the Bitcoin network, or the digital asset markets generally. Such occurrences could also impair the Bitcoin Futures ETF’s ability to meet its investment objective pursuant to its investment strategy. Flex Options Risk. The Fund will utilize FLEX Options issued and guaranteed for settlement by the Options Clearing Corporation (OCC). In the unlikely event that the OCC becomes insolvent or is otherwise unable to meet its settlement obligations, the Fund could suffer significant losses. Additionally, FLEX Options may be less liquid than standard options. In a less liquid market for the FLEX Options, the Fund may have difficulty closing out certain FLEX Options positions at desired times and prices. The values of FLEX Options do not increase or decrease at the same rate as the reference asset and may vary due to factors other than the price of reference asset. New Fund Risk. The fund is new and has a limited operating history.
Roundhill Financial Inc. serves as the investment advisor. The Funds are distributed by Foreside Fund Services, LLC which is not affiliated with Roundhill Financial Inc., U.S. Bank, or any of their affiliates.
Glossary
Options
An option is a contract sold by one party to another that gives the buyer the right, but not the obligation, to buy (call) or sell (put) a stock at an agreed upon price within a certain period or on a specific date.
Covered Call Strategy
A covered call strategy involves writing (selling) covered call options in return for the receipt of premiums. The seller of the option gives up the opportunity to benefit from price increases in the underlying instrument above the exercise price of the options, but continues to bear the risk of underlying instrument price declines.
SOURCE Roundhill Investments
