Amplify launches XRP covered call options ETF, targeting a monthly return of 3%

According to The Block, Amplify ETFs, which manages assets exceeding $16 billion, has launched the Amplify XRP 3% Monthly Premium Income ETF (XRPM), which the company claims is the first options income ETF based on XRP.

The fund is the latest member of the Amplify YieldSmart product line, which is based on covered call options and aims to combine income generation with partial growth exposure. XRPM targets an annualized options fee of 36% and seeks to achieve a 3% monthly return while still capturing some of the weekly upside of Ripple's token.

It attempts to achieve this by selling out-of-the-money call options weekly on a 30% to 60% exposure to XRP tokens, while keeping the remaining 40% to 70% of the exposure unhedged to capture "unlimited" upside potential. Notably, the fund does not directly invest in XRP tokens. This actively managed fund has a management fee rate of 0.75% and distributes income monthly.