ProShares Bitcoin ETF (BITO) Covered Calls

The ProShares Bitcoin Strategy ETF is the first U.S. exchange-traded fund to offer exposure to bitcoin returns through managed futures contracts. Unlike spot ETFs, BITO invests primarily in cash-settled front-month bitcoin futures traded on the Chicago Mercantile Exchange (CME). This structure provides investors with a liquid and regulated vehicle to participate in the digital asset market within traditional brokerage accounts, without the need for direct custody or a crypto wallet.

You can sell covered calls on ProShares Bitcoin ETF to lower risk and earn monthly income. Born To Sell's covered call screener gives you customized search capabilities across all possible covered calls but here are a couple of examples for BITO (prices last updated Fri 4:16 PM ET):

ProShares Bitcoin ETF (BITO) Stock Quote
Last Change Bid Ask Volume P/E Market Cap
9.69 +0.89 9.67 9.69 69.8M - 0.6
Covered Calls For ProShares Bitcoin ETF (BITO)
Expiration Strike Call Bid Net Debit Return
If Flat		 Annualized
Return If Flat
Feb 20 9.5 0.56 9.13 4.1% 100%
Mar 20 10 0.57 9.12 6.2% 52.6%
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Extended Business Description

ProShares Bitcoin Strategy ETF is a pioneering exchange-traded fund designed to provide capital appreciation through actively managed exposure to bitcoin futures. As the first bitcoin-linked ETF approved in the United States, BITO does not invest directly in bitcoin. Instead, it seeks to track the performance of the CME CF Bitcoin Reference Rate by maintaining a portfolio of front-month futures contracts. This provides an institutional-grade framework for investors to gain crypto exposure while benefiting from the protections of the Investment Company Act of 1940.

Core Investment Strategy and Operations

  1. Futures-Based Exposure: The fund gains its market position by entering into standardized, cash-settled bitcoin futures contracts. This strategy avoids the complexities of direct digital asset custody but introduces "roll costs," where the fund must sell expiring contracts and buy new ones, potentially leading to performance differences compared to the spot price.
  2. Collateral Management: To support its futures positions, the fund invests heavily in high-quality, short-term cash instruments, primarily U.S. Treasury bills. This provides a baseline of safety and liquidity for the fund's margin requirements.
  3. Monthly Distributions: BITO is unique among many crypto-linked products for its monthly distribution schedule. These payouts are primarily derived from the net income generated by its treasury holdings and gains from its futures and swap activities.

Competitive Landscape

The competitive environment for BITO has shifted significantly with the arrival of spot bitcoin products. It competes for capital against spot-based giants like the iShares Bitcoin Trust and the Fidelity Wise Origin Bitcoin Fund. Within the specialized strategy space, BITO competes with the 2x Bitcoin Strategy ETF for leveraged traders and the ProShares UltraShort Bitcoin ETF for those seeking inverse exposure. It also faces competition from diversified crypto-equity funds like the Global X Blockchain & Bitcoin Strategy ETF and income-focused vehicles like the YieldMax COIN Option Income Strategy ETF.

Strategic Outlook and Innovation

The fund is focused on maintaining its role as the premier liquidity vehicle for institutional traders who prefer the regulated futures market over spot markets. A primary strategic priority is managing the "contango" and "backwardation" effects inherent in futures rolling to optimize total returns for shareholders. Innovation efforts are directed toward the expansion of the fund's ecosystem, including the robust options market built around BITO, which allows for advanced hedging and income-generation strategies. As the digital asset market matures in 2026, the fund is positioning itself as a tactical tool for volatility management, especially as institutional allocators integrate crypto into standard portfolios. By leveraging its long track record and high average daily trading volume, BITO aims to remain a critical instrument for investors who prioritize the transparency and regulatory familiarity of the CME futures market.