MIAMI, May 10, 2024 (GLOBE NEWSWIRE) -- Defiance ETFs is proud to announce the launch of USOY, the Defiance Oil Enhanced Options Income ETF. USOY marks a significant milestone as the first-ever Oil Income Options Overlay ETF, offering investors a unique opportunity to seek income in the oil sector through options trading.
"We are thrilled to introduce USOY, the first-of-its-kind Oil Income Options Overlay ETF," said Sylvia Jablonski, CEO of Defiance ETFs. "With USOY, investors can access enhanced income potential in the oil market while maintaining exposure to USO's share price movements. Considering the ongoing instability in the Middle East, Defiance believes there's significant potential for oil prices to rally in 2024. USOY is strategically positioned to capitalize on this potential market movement, offering investors a unique opportunity to generate income while participating in the oil market's growth."
USOY, an actively managed ETF, is designed to provide income while maintaining indirect exposure to the share price of the United States Oil Fund, LP (“USO”).
One of the key strategies employed by USOY is an at-the-money or in-the-money put selling approach, enabling the Fund to capture income and exposure to the price movements of USO. By selling put options, the Fund generates current income from the premiums received. Moreover, the Fund's in-the-money put options offer the potential for upside appreciation, commonly referred to as "intrinsic value."
To maximize income generation and manage risk, USOY regularly sells put options priced either at-the-money or up to five percent in-the-money. This strategic approach allows the Fund to profit even if USOY's share price increases above its current level, remains stable, or experiences a slight decrease, provided the decrease is less than the original extrinsic premium received.
About Defiance ETFs
Founded in 2018, Defiance stands as a leading ETF issuer dedicated to income and thematic investing.
Our suite of first-mover thematic ETFs empowers investors to express targeted views on disruptive innovations, including artificial intelligence, machine learning, and quantum computing, while our actively managed options ETFs are designed to seek high income with lower volatility.
Important Disclosures
USOY Disclosure: Defiance ETFs LLC is the ETF sponsor. The Fund’s investment adviser is Toroso Investments, LLC (“Toroso” or the “Adviser”). The investment sub-adviser is ZEGA Financial, LLC (“ZEGA” or the “Sub-Adviser”).
Fund holdings and sector allocations are subject to change at any time and should not be considered recommendations to buy or sell any security.
The Funds' investment objectives, risks, charges, and expenses must be considered carefully before investing. The prospectus contains this and other important information about the investment company. Please read carefully before investing. A hard copy of the prospectuses can be requested by calling 833.333.9383.
Past performance is no guarantee of future results. High ratings does not assure favorable performance.
Investing involves risk. Principal loss is possible. As an ETF, the funds may trade at a premium or discount to NAV. Shares of any ETF are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. A portfolio concentrated in a single industry or country, may be subject to a higher degree of risk.
There is no guarantee that the Fund’s investment strategy will be properly implemented, and an investor may lose some or all of its investment.
Derivatives Risk. Derivatives are financial instruments that derive value from the underlying reference asset or assets, such as stocks, bonds, or funds (including ETFs and ETPs), interest rates or indexes. The Fund’s investments in derivatives may pose risks in addition to, and greater than, those associated with directly investing in securities or other ordinary investments, including risk related to the market, imperfect correlation with underlying investments, higher price volatility, lack of availability, counterparty risk, liquidity, valuation and legal restrictions. The use of derivatives is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. The use of derivatives may result in larger losses or smaller gains than directly investing in securities. When the Fund uses derivatives, there may be an imperfect correlation between the value of the Underlying ETP and the derivative, which may prevent the Fund from achieving its investment objectives. Because derivatives often require only a limited initial investment, the use of derivatives may expose the Fund to losses in excess of those amounts initially invested.
Counterparty Risk. The Fund is subject to counterparty risk by virtue of its investments in options contracts. Transactions in some types of derivatives, including options, are required to be centrally cleared (“cleared derivatives”). In a transaction involving cleared derivatives, the Fund’s counterparty is a clearing house rather than a bank or broker. Since the Fund is not a member of clearing houses and only members of a clearing house (“clearing members”) can participate directly in the clearing house, the Fund will hold cleared derivatives through accounts at clearing members. In cleared derivatives positions, the Fund will make payments (including margin payments) to and receive payments from a clearing house through their accounts at clearing members. Customer funds held at a clearing organization in connection with any options contracts are held in a commingled omnibus account and are not identified to the name of the clearing member’s individual customers. As a result, assets deposited by the Fund with any clearing member as margin for options may, in certain circumstances, be used to satisfy losses of other clients of the Fund’s clearing member. In addition, although clearing members guarantee performance of their clients’ obligations to the clearing house, there is a risk that the assets of the Fund might not be fully protected in the event of the clearing member’s bankruptcy, as the Fund would be limited to recovering only a pro rata share of all available funds segregated on behalf of the clearing member’s customers for the relevant account class. The Fund is also subject to the risk that a limited number of clearing members are willing to transact on the Fund’s behalf, which heightens the risks associated with a clearing member’s default. If a clearing member defaults the Fund could lose some or all of the benefits of a transaction entered into by the Fund with the clearing member. If the Fund cannot find a clearing member to transact with on the Fund’s behalf, the Fund may be unable to effectively implement its investment strategy.
None of the Fund, the Trust, the Adviser, the Sub-Adviser, or their respective affiliates makes any representation to you as to the performance of the Index. THE FUND, TRUST, ADVISER, AND SUB-ADVISER ARE NOT AFFILIATED WITH, NOR ENDORSED BY, THE INDEX.
New Fund Risk: The Fund is a recently organized management investment company with no operating history. As a result, prospective investors do not have a track record or history on which to base their investment decisions.
No 1940 Act Protections: The Underlying ETP is not an investment company subject to the 1940 Act. Accordingly, investors in the Underlying ETP do not have the protections expressly provided by that statute.
An investment in the Fund is not an investment in USO, nor in oil.
Diversification does not ensure a profit nor protect against loss in a declining market.
Commissions may be charged on trades.
USOY is distributed by Foreside Fund Services, LLC.
CONTACT:
David Hanono
Defiance ETFs
+1 833-333-9383
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/b2de5b80-5025-430b-b896-d5334c68cba4
