In short
- Rex-Osprey’s DOJE ETF delivered substantial buying and selling quantity upon its debut Thursday.
- The issuer is now in search of approval for a leveraged ETF product that grants 1-1.5x leveraged publicity to DOJE.
- Past the leveraged lengthy publicity, its goal is to ship weekly distributions to holders.
Rex-Osprey’s DOJE, the primary U.S. spot Dogecoin ETF, produced robust buying and selling volumes when it hit the market on Thursday, touchdown within the high 5 for ETF rollouts thus far this yr. And its issuer has already filed for a riskier, leveraged play on it.
In a submitting registered with the SEC on Thursday, Rex-Osprey utilized to launch the REX DOJE Development & Revenue ETF, an alternate traded product that goals to supply between 105-150% publicity to the worth return of DOJE on a single day.
“As a result of the fund seeks day by day leveraged funding outcomes, it is vitally completely different from most different exchange-traded funds,” the submitting reads. “Because of this, the fund could also be riskier than options that don’t use leverage.”
The REX DOJE Development & Revenue ETF portfolio shall be composed of three separate elements: leveraged lengthy publicity within the underlying Dogecoin ETF (DOJE), a lined name technique to generate revenue, and funding in short-term treasuries or cash market funds.
Its major goal is to pay weekly distributions, with a secondary goal of incomes day by day funding outcomes between 1-1.5x the % change of DOJE.
The leveraged funding submitting shouldn’t be new to Rex-Osprey, which gives a wide range of leveraged ETF performs, providing higher publicity however extra threat for traders.
Its newest prospectus makes it well-known that this extra threat shouldn’t be for everybody.
“The fund shouldn’t be appropriate for all traders,” it reads. “The fund is designed to be utilized solely by educated traders who perceive the potential penalties of in search of focused day by day leveraged funding outcomes, perceive the dangers related to the usage of leverage, and are prepared to watch their portfolios regularly.”
Due to the day by day leveraged make-up, the agency additionally notes that past a single day the fund will lose if DOJE’s return is flat, and it’s additionally doable the Development & Revenue ETF will lose even when the DOJE ETF will increase over greater than a day.
Moreover, the prospectus signifies that there isn’t a assure the technique shall be carried out correctly, or that it will likely be in a position to pay weekly distributions.
Dogecoin (DOGE) is down 6% within the final 24 hours to $0.265. The main meme coin has jumped greater than 22% within the final month, however stays round 64% off its 2021 all-time excessive of $0.73.
Rex-Osprey’s customary DOJE ETF started buying and selling on Thursday and generated about $17 million value of buying and selling quantity, placing it within the high 5 for first-day quantity amongst ETF launches this yr, in accordance with Bloomberg Senior ETF Analyst Eric Balchunas.
The Rex-Osprey XRP ETF, in the meantime, additionally launched on Thursday and noticed a lot stronger demand, topping this yr’s checklist of latest fund rollouts with almost $38 million in buying and selling quantity.
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