YBTC will now seek to pay weekly distributions
to shareholders and trade options on spot
bitcoin ETFs to implement its investment
strategy.
NEW
YORK, Dec. 13, 2024 /PRNewswire/ -- Roundhill
Investments, an ETF sponsor focused on innovative financial
products, today announced that the Roundhill Bitcoin
Covered Call Strategy ETF (YBTC) intends to make weekly
distributions to shareholders starting in January 2025.
Additionally, following the recent approval and listing of
spot bitcoin ETF options, the Fund will utilize
options on spot bitcoin ETFs to implement its
investment strategy.
Roundhill believes that the use of spot bitcoin ETF
options allows for the Fund to be more efficient and precise in
implementing its covered call strategy.
The Fund's anticipated 2025 distribution calendar is now
available
at: https://www.roundhillinvestments.com/etf/ybtc/
About Roundhill Investments:
Founded in 2018, Roundhill Investments is an SEC-registered
investment advisor focused on innovative exchange-traded funds.
Roundhill's suite of ETFs offers distinct and differentiated
exposures across thematic equity, options income, and trading
vehicles. Roundhill offers a depth of ETF knowledge and experience,
as the team has collectively launched more than 100+ ETFs including
several first-to-market products. To learn more about the company,
please visit roundhillinvestments.com.
Investors should consider the investment objectives, risks,
charges, and expenses carefully before investing. For a prospectus
or summary prospectus, if available, with this and other
information about the Fund, please call 1-855-561-5728 or visit our
website https://www.roundhillinvestments.com/etf/YBTC. Read
the prospectus or summary prospectus carefully before
investing.
All investing involves risk, including the risk of loss of
principal. There is no guarantee the investment strategy
will be successful. The fund faces numerous risks, including
options risk, liquidity risk, market risk, active management risk,
active market risk, clearing member default risk, credit
risk, derivatives risk, legislation and litigation risk,
operational risk, trading halt risk, valuation risk and
non-diversification risk. For a detailed list of fund risks see the
prospectus.
Covered Call Strategy Risk. A covered call strategy
involves writing (selling) covered call options in return for the
receipt of premiums. The seller of the option gives up the
opportunity to benefit from price increases in the underlying
instrument above the exercise price of the options, but continues
to bear the risk of underlying instrument price declines. The
premiums received from the options may not be sufficient to offset
any losses sustained from underlying instrument price declines,
over time. As a result, the risks associated with writing covered
call options may be similar to the risks associated with writing
put options. Exchanges may suspend the trading of options during
periods of abnormal market volatility. Suspension of trading may
mean that an option seller is unable to sell options at a time that
may be desirable or advantageous to do so.
The covered call strategy utilized by the Fund is "synthetic"
because the Fund's exposure to the price return of
the Bitcoin ETFs is derived through options
exposure, rather than direct holdings of the shares of the
Bitcoin ETFs. Because such exposure is synthetic, it
is possible that the Fund's participation in the price return of
the Bitcoin ETFs may not be as precise as if the Fund
were directly holding shares of the Bitcoin ETFs.
Bitcoin ETF Risks. The Fund will have
significant exposure to the Bitcoin ETFs through its
Bitcoin ETF Option positions. Accordingly, the Fund
will be subject to the risks of the Bitcoin ETFs, set
forth below. In addition to these risks, the Bitcoin
ETFs are also subject to the following risks to which the Fund is
also subject, which are described within the section entitled
"Principal Risks": Active Market Risk, Asset Class Risk,
Concentration Risk, Cybersecurity Risk, Legislation and Litigation
Risk, Operational Risk and Structural ETF Risk.
Bitcoin Risk. Bitcoin is a
relatively new innovation and the market for bitcoin
is subject to rapid price swings, changes and uncertainty. The
further development of the Bitcoin network and the
acceptance and use of bitcoin are subject to a variety
of factors that are difficult to evaluate. The value of
bitcoin has been, and may continue to be,
substantially dependent on speculation, such that trading and
investing in these assets generally may not be based on fundamental
analysis. The slowing, stopping or reversing of the development of
the Bitcoin network or the acceptance of
bitcoin may adversely affect the price of
bitcoin. Bitcoin is subject to the risk
of fraud, theft, manipulation or security failures,
operational or other problems that impact the digital asset trading
venues on which bitcoin trades. The
Bitcoin blockchain may contain flaws that can be
exploited by hackers. A significant portion of bitcoin
is held by a small number of holders sometimes referred to as
"whales." Transactions of these holders may influence the price of
bitcoin.
Digital Asset Regulatory Risk. There is a lack of
consensus regarding the regulation of digital assets, including
bitcoin, and their markets. As a result of the growth
in the size of the digital asset market, as well as the 2022
Events, the U.S. Congress and a number of U.S. federal and state
agencies (including FinCEN, SEC, OCC, CFTC, FINRA, the Consumer
Financial Protection Bureau, the Department of Justice, the
Department of Homeland Security, the Federal Bureau of
Investigation, the Internal Revenue Service, state financial
institution regulators, and others) have been examining the
operations of digital asset networks, digital asset users and the
digital asset markets. Many of these state and federal agencies
have brought enforcement actions or issued consumer advisories
regarding the risks posed by digital assets to investors. Ongoing
and future regulatory actions with respect to digital assets
generally or bitcoin in particular may alter, perhaps
to a materially adverse extent, the nature of an investment in the
shares of a Bitcoin ETF or the ability of the
Bitcoin ETF to continue to operate.
Custody Risk. Security breaches, computer malware and
computer hacking attacks have been a prevalent concern in relation
to digital assets. The bitcoin held by the
Bitcoin ETFs' custodian will likely be an appealing
target to hackers or malware distributors seeking to destroy,
damage or steal the Bitcoin ETFs' bitcoins. To the
extent that the Bitcoin ETFs and their service
providers are unable to identify and mitigate or stop new security
threats or otherwise adapt to technological changes in the
digital asset industry, a Bitcoin ETF's bitcoins may
be subject to theft, loss, destruction or other attack.
Flex Options Risk. Trading FLEX Options involves risks
different from, or possibly greater than, the risks associated with
investing directly in securities. The Fund may experience losses
from specific FLEX Option positions and certain FLEX Option
positions may expire worthless. The FLEX Options are listed on an
exchange; however, no one can guarantee that a liquid secondary
trading market will exist for the FLEX Options. In the event that
trading in the FLEX Options is limited or absent, the value of the
Fund's FLEX Options may decrease. In a less liquid market for the
FLEX Options, liquidating the FLEX Options may require the payment
of a premium (for written FLEX Options) or acceptance of a
discounted price (for purchased FLEX Options) and may take longer
to complete. A less liquid trading market may adversely impact the
value of the FLEX Options and Fund shares and result in the Fund
being unable to achieve its investment objective. Less liquidity in
the trading of the Fund's FLEX Options could have an impact on the
prices paid or received by the Fund for the FLEX Options in
connection with creations and redemptions of the Fund's shares.
Depending on the nature of this impact to pricing, the Fund may be
forced to pay more for redemptions (or receive less for creations)
than the price at which it currently values the FLEX Options. Such
overpayment or under collection could reduce the Fund's ability to
achieve its investment objective. Additionally, in a less liquid
market for the FLEX Options, the liquidation of a large number of
options may more significantly impact the price. A less liquid
trading market may adversely impact the value of the FLEX Options
and the value of your investment. The trading in FLEX Options may
be less deep and liquid than the market for certain other
exchange-traded options, non-customized options or other
securities.
Liquidity Risk. The market for Bitcoin
ETF Options is still developing and may be subject to periods of
illiquidity. During such times it may be difficult or impossible to
buy or sell a position at the desired price. Market disruptions or
volatility can also make it difficult to find a counterparty
willing to transact at a reasonable price and sufficient size.
Illiquid markets may cause losses, which could be significant. The
large size of the positions which the Fund may acquire increases
the risk of illiquidity, may make its positions more difficult to
liquidate, and may increase the losses incurred while trying to do
so. Such large positions also may impact the price of
Bitcoin ETF Options.
Counterparty Risk. Fund transactions involving a
counterparty are subject to the risk that the counterparty will not
fulfill its obligation to the Fund. Counterparty risk may arise
because of the counterparty's financial condition (i.e., financial
difficulties, bankruptcy, or insolvency), market activities and
developments, or other reasons, whether foreseen or not. A
counterparty's inability to fulfill its obligation may result in
significant financial loss to the Fund. The Fund may be unable to
recover its investment from the counterparty or may obtain a
limited recovery, and/or recovery may be delayed.
New Fund Risk. The fund is new and has a limited
operating history.
Options Risk. The use of options involves investment
strategies and risks different from those associated with ordinary
portfolio securities transactions and depends on the ability of the
Fund's portfolio managers to forecast market movements correctly.
The prices of options are volatile and are influenced by, among
other things, actual and anticipated changes in the value of the
underlying 6 instrument, or in interest or currency exchange rates,
including the anticipated volatility, which in turn are affected by
fiscal and monetary policies and by national and international
political and economic events. The effective use of options also
depends on the Fund's ability to terminate option positions at
times deemed desirable to do so. There is no assurance that the
Fund will be able to effect closing transactions at any particular
time or at an acceptable price. In addition, there may at times be
an imperfect correlation between the movement in values of options
and their underlying securities and there may at times not be a
liquid secondary market for certain options.
Assignment Risk. In response to a notification of an
option holder's desire to exercise the option held, the OCC may
randomly assign the exercise notice to a clearing member, which
must then assign, randomly or on a first-in-first-out basis, the
obligation to a customer who has written that particular option. If
the Fund is assigned an exercise notice, the Fund pays the buyer
the difference between the option price on the exercise date and
the option price when written by the Fund. As a result, the Fund
may be forced to settle a written option position at an inopportune
time and at a cost to the Fund, both of which could adversely
affect the Fund's performance and ability to track the performance
of the Bitcoin ETFs.
Derivatives Risk. The use of derivative instruments
involves risks different from, or possibly greater than, the risks
associated with investing directly in securities and other
traditional investments. These risks include: (i) the risk that the
counterparty to a derivative transaction may not fulfill its
contractual obligations; (ii) risk of mispricing or improper
valuation; and (iii) the risk that changes in the value of the
derivative may not correlate perfectly with the underlying asset.
Derivative prices are highly volatile and may fluctuate
substantially during a short period of time. Such prices are
influenced by numerous factors that affect the markets, including,
but not limited to: changing supply and demand relationships;
government programs and policies; national and international
political and economic events, changes in interest rates, inflation
and deflation and changes in supply and demand relationships.
Trading derivative instruments involves risks different from, or
possibly greater than, the risks associated with investing directly
in securities. Derivative contracts ordinarily have leverage
inherent in their terms. The use of leverage may cause the Fund to
liquidate portfolio positions when it would not be advantageous to
do so in order to satisfy its obligations or to meet regulatory or
contractual requirements for derivatives. The use of derivatives
can magnify potential for gain or loss and, therefore, amplify the
effects of market volatility on share price.
Distribution Tax Risk. The Fund currently expects to
make distributions on a weekly basis. These distributions may
exceed the Fund's income and gains for the Fund's taxable year.
Distributions in excess of the Fund's current and accumulated
earnings and profits will be treated as a return of capital. A
return of capital distribution generally will not be taxable but
will reduce the shareholder's cost basis and will result in a
higher capital gain or lower capital loss when those Fund Shares on
which the distribution was received are sold. Once a Fund
shareholder's cost basis is reduced to zero, further distributions
will be treated as capital gain if the Fund shareholder holds Fund
Shares as capital assets. Additionally, any capital returned
through distributions will be distributed after payment of Fund
fees and expenses. Because a portion of the Fund's distributions
may consist of return of capital, the Fund may not be an
appropriate investment for investors who do not want their
principal investment in the Fund to decrease over time or who do
not wish to receive return of capital in a given period. In the
event that a shareholder purchases Fund Shares shortly before a
distribution by the Fund, the entire distribution may be taxable to
the shareholder even though a portion of the distribution
effectively represents a return of the purchase price.
Roundhill Financial Inc. serves as the investment advisor. The
Funds are distributed by Foreside Fund Services, LLC which is not
affiliated with Roundhill Financial Inc., U.S. Bank, or any of
their affiliates.
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SOURCE Roundhill Investments