Key Points
- REX Shares introduced GIF, an ETF that combines nine leveraged covered-call single-stock strategies designed to produce income
- The portfolio features crypto-related equities Coinbase and Strategy, plus Nvidia, Tesla, Palantir, and additional holdings
- GIF provides 1.25x leveraged exposure to each stock while distributing weekly income generated from covered call option premiums
- 21Shares debuted a Strategy preferred stock ETP in Europe (STRC NA) on Euronext Amsterdam during the same week
- Strategy currently ranks as the most heavily shorted large-cap US equity according to Goldman Sachs, with shares declining over 60% across six months
REX Shares, an asset management firm based in the United States, introduced a new exchange-traded fund this week trading under the ticker GIF. The product consolidates nine leveraged single-stock covered-call strategies into a unified offering that delivers weekly income to investors.
The fund maintains equal-weighted allocations across nine REX single-stock ETFs. Each component ETF seeks approximately 1.25x leveraged exposure to its underlying equity while simultaneously selling covered call options to collect premium income.
A covered call strategy involves selling options contracts on equities the fund already holds. Option buyers pay premiums upfront, providing the fund with income while limiting the potential gains if the underlying stock experiences significant price appreciation.
GIF began trading on Cboe Global Markets. The fund’s nine underlying stocks include Nvidia, Tesla, Strategy, Coinbase, Robinhood, Palantir, CoreWeave, Eli Lilly, and Walmart.
Coinbase and Strategy represent the crypto-connected holdings within the portfolio. The remaining companies operate across AI, healthcare, retail, and technology industries.
Strategy, previously operating under the name MicroStrategy, holds the distinction of being the largest corporate Bitcoin holder. The company’s treasury contains 717,722 BTC, representing approximately 3.4% of Bitcoin’s capped 21 million coin supply.
Despite this substantial Bitcoin position, Strategy’s equity has faced significant pressure. The stock has declined more than 60% during the past six months and approximately 50% over the past year, based on Yahoo Finance data.
Strategy also currently tops Goldman Sachs’ latest ranking of most heavily shorted large-cap US equities, measured by short interest as a percentage of market capitalization.
European Markets Welcome New Strategy-Linked Products
The GIF debut occurred during an eventful week for Strategy-related investment vehicles. On Wednesday, 21Shares unveiled a new exchange-traded product offering European investors access to STRC, Strategy’s variable-rate perpetual preferred stock.
The 21Shares Strategy Yield ETP commenced trading on Euronext Amsterdam under the ticker STRC NA on Thursday. Strategy characterizes STRC as a digital credit instrument carrying an 11.25% annual dividend yield.
The security connects to Strategy’s Bitcoin treasury and forms part of the company’s broader initiative to create fixed-income instruments backed by its BTC holdings.
Also on Wednesday, Prevalon Energy and Anchorage Digital both revealed they had added STRC allocations to their corporate treasuries. Both companies withheld specific details regarding position sizes.
Understanding GIF ETF Income Distributions
Income generated by the GIF ETF originates from covered call premiums gathered across all nine component funds. Each underlying ETF structures its distributions to occur weekly.
The 1.25x leverage component means the fund magnifies both positive and negative price movements compared to direct stock ownership. Investors accept reduced upside potential in return for consistent premium income streams.
REX Shares has yet to announce a target yield percentage for GIF. Weekly distribution amounts will fluctuate based on prevailing market volatility levels and option pricing dynamics.
