TLDR
- REX Shares debuted the GIF ETF this week, combining nine leveraged covered-call strategies focused on individual stocks into a single income-generating vehicle
- Cryptocurrency-adjacent equities Coinbase and Strategy join seven other holdings including Nvidia, Tesla, and Palantir
- The fund seeks 1.25x leveraged exposure per stock and distributes weekly income generated from selling covered calls
- 21Shares introduced a Strategy preferred stock ETP in Europe (STRC NA) via Euronext Amsterdam during the same week
- Goldman Sachs now lists Strategy as the most heavily shorted large-cap US equity, with the stock declining more than 60% in half a year
REX Shares, an asset management firm based in the United States, introduced a novel exchange-traded fund trading under the ticker GIF earlier this week. This product consolidates nine leveraged single-stock covered-call approaches into a unified offering engineered to deliver weekly cash flow to shareholders.
The portfolio maintains equal-weighted allocations to nine distinct REX single-stock ETFs. Every component ETF pursues approximately 1.25x leveraged exposure to its respective equity while simultaneously writing covered call contracts to capture option premium revenue.
Writing covered calls involves selling call options on equities the fund currently owns. Option purchasers pay an upfront premium, providing immediate revenue to the fund while limiting potential gains if the underlying stock experiences significant price appreciation.
GIF commenced trading on Cboe Global Markets. The nine constituent stocks include Nvidia, Tesla, Strategy, Coinbase, Robinhood, Palantir, CoreWeave, Eli Lilly, and Walmart.
Coinbase and Strategy represent the two cryptocurrency-exposed companies within the portfolio. The remaining holdings cover artificial intelligence, healthcare, consumer retail, and broader technology segments.
Strategy, previously operating as MicroStrategy, has accumulated the most substantial corporate Bitcoin position globally. The company presently owns 717,722 BTC, representing approximately 3.4% of Bitcoin’s capped 21 million token supply.
Notwithstanding this massive Bitcoin position, Strategy’s equity performance has been disappointing. The stock has tumbled over 60% during the preceding six-month period and approximately 50% across the last twelve months, per Yahoo Finance tracking.
Strategy now tops Goldman Sachs’ latest roster as the most heavily shorted large-cap US stock when measuring short interest against total market capitalization.
European Markets See Fresh Strategy-Based Investment Products
The GIF introduction coincided with heightened activity surrounding Strategy-related financial instruments. This Wednesday, 21Shares unveiled a new exchange-traded product providing European market participants access to STRC, Strategy’s variable-rate perpetual preferred equity.
The 21Shares Strategy Yield ETP started trading Thursday on Euronext Amsterdam with the ticker STRC NA. Strategy characterizes STRC as a digital credit vehicle carrying an 11.25% annualized dividend rate.
This product connects to Strategy’s Bitcoin reserves and represents part of the corporation’s broader initiative to distribute fixed-income securities backed by its cryptocurrency treasury holdings.
Also Wednesday, both Prevalon Energy and Anchorage Digital revealed treasury allocations to STRC securities. Neither organization specified the dollar value of their respective investments.
Understanding GIF ETF Distribution Mechanics
Revenue generated by the GIF ETF originates from covered call premiums harvested across all nine component funds. Each constituent ETF is structured to pass through this income via weekly payouts.
The 1.25x leverage multiplies both positive and negative returns relative to directly owning the underlying stocks. Participants sacrifice a portion of upside potential in return for consistent premium income streams.
REX Shares has not published a specific yield target for GIF. Weekly distribution amounts will fluctuate based on prevailing market volatility levels and option pricing dynamics.
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