REX IncomeMax ETF Taps Volatile Crypto Firms to Turn Price Swings Into Weekly Income

REX Shares unveiled an exchange-traded fund on Friday that will try to turn price swings into weekly income for some of the most volatile stocks on the US market, including crypto-focused companies.

The product, dubbed the REX IncomeMax Option Strategy ETF, follows a hedge fund-style strategy to provide cash flow through option premium income, the company said in a statement. To that end, the ETF will have exposure to as many as 30 publicly traded companies, REX added.

The ETF has not made its first distribution yet, but it currently holds $230,000 of equity in crypto mining company Core Scientific, crypto exchange Gemini, and blockchain lender Figura. The last ones two companies debuted on Wall Street earlier this year.

Trading under the ticker symbol “ULTI,” REX’s latest ETF “manages a mix of put and call positions” on volatile stocks, with “disadvantage mitigation against extreme market swings” by actively buying and selling securities, according to the company. website.

“ULTI represents a breakthrough from what we’ve done before, in that it’s a very actively managed income generation strategy based on the most volatile names in the market,” said Greg King, founder and CEO of REX and Osprey Funds. Decrypt.

An option premium reflects the price a buyer pays to acquire an option contract, as well as the amount a seller receives for taking on the obligation to buy or sell the underlying asset. By purchasing options contracts, buyers gain amplified exposure to price changes.

The composition of the ETF is expected to change on a weekly basis, suggesting that there may be some periods where the product does not maintain exposure to crypto companies. However, the dynamics show how REX creates products related to the crypto market in many ways.

“This has more of an income focus for investors, rather than a particular sector focus, so it’s a bit of a coincidence,” King said. “I imagine it will stay that way for a while, just because crypto is an emerging field.”

The company, for example, was behind the first ETF that offered exposure to XRP in the United States, which debuted last month. At the same time, the firm also presented an ETF with Osprey Funds that is linked to Dogecointhe same currency of $28 billion.

The latest REX ETF is distinguished by Crypto Equity Premium Income ETF, which is modeled on an index of 25 companies in the United States that are actively engaged in crypto-related activities. The ETF has made 10 distributions since its inception in January, but they are not guaranteed.