Tap Into 0DTE Call Options With New Roundhill ETFs | ETF Trends

On Thursday, Roundhill Investments launched a pair of ETFs, the Roundhill S&P 500 0DTE Covered Call Strategy ETF (XDTE) and the Roundhill N-100 0DTE Covered Call Strategy ETF (QDTE). Both funds are trading on the Cboe BZX Exchange.

At the start of trading, XDTE and QDTE sell zero-days-to-expiration (0DTE) covered call options. These expire within the same trading day. Roundhill Investments says these funds are the first to exploit the benefits of selling 0DTE options.

According to the fund prospectus, both XTDE and QTDE offer synthetic long exposure to their respective indices. Both funds aim to provide shareholders with weekly distribution payments.

Active Options Strategies

XTDE is actively managed and has a net expense ratio of 0.95%. The fund’s priority is to provide weekly current income along with exposure to the S&P 500 Index’s price return, the fund document says. To do so, XDTE plans to buy and sell covered call options that use the index as a reference asset.

QDTE implements the same strategy but with options tied to the Nasdaq-100 Index. Like its sister fund, it has a net expense ratio of 0.95%.

“XDTE and QDTE offer investors the potential for high levels of income on a weekly basis,” said Roundhill Chief Strategy Officer Dave Mazza.

“Both ETFs allow investors to potentially benefit from structural mispricings inherent to the short-dated options market while maintaining exposure to major equity indexes,” he added.

These latest launches bring Roundhill Investments’ number of funds listed in the U.S. to 13, representing roughly $730 million in assets under management. Its largest fund is the Roundhill Ball Metaverse ETF (METV), which has $430 million in assets. It has more assets than any other ETF covering the metaverse space.

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