Alternative Investments/Digital: A New YieldMax ETF Uses Calls On CoinBase To Generate Income

The YieldMax™ Coinbase Option Income Strategy ETF carries an expense ratio of 0.99%.

YieldMax™ has introduced a new ETF on August 15, 2023, titled YieldMax™ COIN Option Income Strategy ETF (NYSEARCA: CONY). It employs a synthetic covered call approach to generate monthly income from Coinbase Global, Inc. (NASDAQ: COIN).

This actively managed ETF is overseen by ZEGA Financial, with a focus on producing monthly income for investors. It’s important to note that CONY does not directly invest in COIN shares. Coinbase is an American publicly traded company that operates a cryptocurrency exchange platform and is the largest cryptocurrency exchange in the United States by trading volume.

CONY joins the expanding roster of YieldMax™ ETFs and aligns with the overarching goal of delivering substantial monthly income to its investors. (GlobeNewswire)

The advisory role for all YieldMax™ ETFs is fulfilled by Tidal Financial Group, with ZEGA Financial serving as their sub-adviser.

“Investors have turned to growth stocks in 2023 but many of them do not pay a dividend,” Todd Rosenbluth, head of research at VettaFi, said. “With the new ETF, investors can earn income and potentially protect the downside while gaining exposure to a growth company.”

The fortunes of Coinbase are linked to the crypto market. A recent report from brokerage firm Bernstein highlighted the potential significance of the SEC’s approving Bitcoin Spot Exchange-Traded Funds (ETFs) in driving a new cycle of growth in the cryptocurrency market. These ETFs would not only create demand in the spot market but also trigger a positive market signal, attracting retail and institutional flows seeking the sector’s legitimacy.

Tidal Financial Group offers a comprehensive suite of services, tools, and methodologies geared towards introducing enduring concepts to the market. Their mission revolves around ETF innovation, enabling issuers with the knowledge and resources required to efficiently launch ETFs and optimize growth in a fiercely competitive landscape.

ZEGA Financial, founded in 2011, holds SEC registration as an investment adviser and manager specializing in derivatives. Utilizing technology, data, experience, and proprietary strategies, ZEGA creates products and services catering to advisors and individual investors. The firm’s core focus is on aiding investors in navigating volatile and uncertain markets through inventive hedging strategies.

ZEGA’s CEO and Co-Founder, Jay Pestrichelli, authored a best-selling book, “Buy and Hedge, the Five Iron Rules for Investing Over the Long Term,” which underpins the firm’s foundational principles and the bridging of complex options investing with everyday investor needs.

As of August 14, 2023, none of the YieldMax™ ETFs held shares in Coinbase Global, Inc. (COIN). Their COIN holdings remained at 0.00% on that date.

Related Story: Bernstein Paints Bullish Picture Of Crypto If SEC Flags Off A Spot Bitcoin ETF

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