news 
New NEOS’ Ethereum ETF Promises Bigger Yields Through Risky Options Play
In a bid to offer bigger yields for investors, New NEOS has filed for a High Income Ethereum ETF that utilizes indirect exposure to spot Ethereum ETFs and active options trading. This synthetic covered call approach aims at boosting returns by incorporating both calls and puts in its portfolio.
The move comes after Ethereum ETFs have recently outperformed their Bitcoin counterparts, a rare occurrence that may have emboldened issuers to test income-focused designs. NEOS already runs a high-income strategy on Bitcoin ETF exposures and appears poised to replicate this playbook with Ether.
New NEOS’ filing has sparked interest in the crypto market, as it promises a potentially more attractive yield for investors willing to tolerate higher complexity and amplified drawdowns. The fund’s risk profile, however, introduces path dependence where option premiums, strikes, and positioning have a significant impact on returns alongside spot price.
As a result, covered calls can limit upside during strong rallies, while hedges may drag on returns when markets experience prolonged increases. Furthermore, indirect exposure to Ether via the ETFs may not perfectly track the spot Ethereum price, and active overlays introduce operational and liquidity risks that conservative investors should carefully consider.
The fund’s launch is contingent upon approval from the Securities and Exchange Commission (SEC), and the filing did not specify a date for its listing or fees. If approved, investors will be keenly watching how the portfolio adjusts strike selection, tenor, and hedge ratios across market regimes.
In essence, New NEOS’ innovative approach has sparked excitement in the Ethereum ETF space as it offers a potential solution for income-oriented investors seeking higher returns without surrendering exposure to the growing cryptocurrency.
Source: crypto-economy.com
