Hedgeye has filed for a spot Bitcoin ETF that layers options strategies onto direct spot exposure, aiming to reduce volatility and cap downside risk through proprietary “Risk Range” signals.
The fund, named Hedgeye Hedged Bitcoin ETF and set to trade under ticker HBIT on NYSE Arca, combines holdings of spot Bitcoin ETFs with an options overlay. According to Bloomberg ETF analyst James Seyffart, the strategy will “hold spot Bitcoin ETFs and use options strategies to reduce vol and downside risk.”
The prospectus describes the mechanism plainly: the fund will “reduce volatility and manage downside risk through an options strategy that involves the purchase and/or sale of put and call options.” Hedgeye Risk Management, LLC serves as the adviser and provides the proprietary signals that guide positioning adjustments.
The fund adjusts options placement based on market conditions, implied volatility, Bitcoin price trends, liquidity, and other factors. Both standardized exchange-traded options and FLEX Options (customizable exchange-listed contracts) are eligible holdings. The Options Clearing Corporation guarantees settlement of both types.
The hedge carries a structural trade-off. The fund intends to smooth performance during downturns but will “frequently forgo some upside potential” during strong advances. “The premiums received from writing options are intended to provide income to offset the cost of buying options,” the prospectus states.
Bitcoin was trading at $62,719 at press time. The prospectus is preliminary and notes that information “is not complete and may be changed.” Securities may not be sold until SEC registration becomes effective.
Hedgeye did not disclose a filing date, expected SEC decision timeline, fee structure, or expense ratio. The company also did not detail the specific options strategies (collar, put spread, or other structures) that will be employed, or provide backtests of the “Risk Range” signal methodology.
