Amplify’s XRP options ETF is a covered-call product that holds ETFs tracking XRP spot prices and sells call options (typically up to ~10% above market) to generate income. It does not hold XRP directly; premiums provide downside cushion while upside is capped at option strike prices.
Income via covered calls on XRP spot-tracking ETFs
Does not hold XRP directly; uses third‑party XRP spot ETFs as underlying exposures.
Typical call strikes up to ~10% above market; premiums cushion losses but cap upside.
Amplify XRP options ETF: covered-call income on XRP spot ETFs, capped upside with premium cushion — read analysis and implications for investors. Learn more now.
What is the Amplify XRP options ETF and how does it work?
The Amplify XRP options ETF is a covered‑call fund that invests in ETFs tracking XRP spot prices rather than holding XRP directly. It generates income by selling call options on those XRP spot ETFs, typically putting strike prices at or up to roughly 10% above current market levels, which limits upside while producing option premium income.
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The fund sells call options against its ETF holdings to earn premiums. If XRP posts a small gain, investors keep both the premium and underlying ETF appreciation. If XRP rallies substantially above the strike, gains are capped at the strike price and excess appreciation is foregone. Premiums also provide a buffer against downside price moves.
Amplify structures the product to hold regulated ETFs that track XRP spot prices instead of the token to streamline custody, compliance, and operational processes. This approach leverages existing ETF wrappers and allows the fund to apply an options overlay without direct token custody responsibilities.
Key risks include general market and ETF risks, high XRP volatility, supply dynamics, and potential network or regulatory events that could affect XRP value. The covered‑call strategy reduces volatility exposure via premiums but introduces cap risk—substantial rallies can be partially or fully foregone at strike levels.
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Source: https://en.coinotag.com/amplify-seeks-approval-for-etf-that-would-sell-calls-on-xrp-etfs-to-generate-income/