Key Takeaways
- Amplify ETFs is launching XRPM, the first ETF offering option income based on XRP.
- XRPM provides monthly income and partial upside exposure to XRP price appreciation using a covered call strategy.
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Amplify ETFs, an issuer known for its specialized and income-focused ETF strategies, is rolling out the Amplify XRP 3% Monthly Premium Income ETF, the first exchange-traded fund designed to generate recurring income from an options strategy tied to XRP, according to a Tuesday announcement.
The fund, trading on Cboe BZX under the ticker XRPM, does not invest directly in XRP, but seeks to capture XRP’s price return through XRP futures ETFs and spot XRP ETFs, as noted in its latest prospectus.
“With XRPM, investors gain access to an innovative approach that combines high option premium income with meaningful weekly upside tied to one of the world’s most established digital assets,” said Christian Magoon, CEO of Amplify ETFs. “Our YieldSmart approach delivers consistent income potential and exposure to XRP’s growth as a leading high-speed asset for global payments.”
XRPM targets 36% annual option premium income, based on market conditions at the prospectus’ effective date, plus partial weekly XRP price appreciation on the covered portion of the portfolio, and preserves unlimited upside on the remainder of the portfolio. The fund writes weekly out-of-the-money call options on a portion of the portfolio’s XRP price exposure.
The fund typically covers 30% to 60% of the portfolio with weekly covered calls written 5% to 10% out-of-the-money, while 40% to 70% of the portfolio remains long only with unlimited upside potential. XRPM distributes income monthly and carries a 0.8% expense ratio.
Using short-dated weekly options instead of monthly ones gives XRPM four times the reset opportunities to adjust strike prices and harvest premiums, Amplify ETFs explains. That means the fund can quickly respond to market conditions, dialing in higher strikes when XRP trends up or pulling in closer to maximize income during choppy moves.
The announcement follows the launch of the first spot XRP ETF in the US, the Canary XRP ETF. The ETF currently holds around $265 million worth of XRP, the fourth-largest crypto by market cap.
Amplify ETFs had over $16.0 billion in assets under management as of late October.
In addition to the new XRP-linked product, the firm plans to launch the Amplify Solana 3% Monthly Option Income ETF, which would generate monthly income through options on Solana-linked assets.