Leverage Shares has launched Europe’s first exchange-traded products (ETPs) offering covered calls on single securities.
The firm listed a trio of ETPs on the London Stock Exchange on Tuesday:
IncomeShares NVIDIA (NVDA) Options ETP (NVDI)
IncomeShares Tesla (TSLA) Options ETP (TSLI)
IncomeShares Gold+ Yield ETP (GLDE)
The two single stock ETPs carry total expense ratios (TERs) of 0.55%, while the gold ETP carries a TER of 0.35%.
NVDI and TSLI directly purchase physical shares of their underlying, while GLDE buys shares of SPDR Gold Shares ETF (GLD) to gain physical exposure to gold. Leverage Shares then sells weekly call options with strike prices 3-5% out-of-the-money.
This limits an investor’s potential upside return but provides a consistent monthly premium which mitigates some downside risk if the price of the underlying falls.
Oktay Kavrak, director of strategy and communications at Leverage Shares, commented: "Structured products are a European specialty, yet the US has overtaken us in the widespread adoption of such strategies and the ETF wrapper played a crucial role in this shift.
“We want to bring that same access to options strategies for investors across Europe and the UK.”
Leverage Shares noted it plans to add to its covered call IncomeShares ETP range “in the coming months”.
The new launches come after the firm unveiled an eight-strong range of ETPs offering short and leveraged exposure to the ‘magnificent seven’, semiconductor and AI stocks in April.
