When most crypto investors consider Ether‘s (CRYPTO: ETH) volatility, they often experience heartburn. But Amplify ETFs sees opportunity in the yield. On Oct 9, the Chicago issuer launched two Ether-centered funds, the Amplify Ethereum 3% Monthly Option Income ETF (BATS:ETTY) and the Amplify Ethereum Max Income Covered Call ETF (BATS:EHY), that seek to extract steady cash flow from one of the most volatile assets in the digital cosmos.
Both funds are members of Amplify’s YieldSmart family, which converts market volatility into possible monthly distributions through covered call strategies. However, in contrast to standard crypto products that merely mirror Ether’s rollercoaster ride in price, ETTY and EHY offer a more stable performance: monthly dividends are generated from trading in weekly options.
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Translating Volatility Into A Paycheck
ETTY aims for a 36% yearly option premium income, working to provide about 3% monthly payments while still earning a portion of Ether’s upside. It achieves this by selling 5–10% out-of-the-money weekly calls on some of its Ether-tied holdings. This strategy allows it to reset its strike prices four times a month, compounding income possibilities.
Its more aggressive sibling, EHY, leans into volatility even further. Built for highest yield, EHY seeks to generate 50–80% per annum option premium income by writing weekly calls on all of its Ether exposure. The objective? Turn mayhem into money while maintaining a tight 5–10% window for weekly upside participation.
Covered Calls Meet Crypto Cred
Covered call ETFs are already well established in legacy markets, like the JPMorgan Equity Premium Income ETF
(NYSE:JEPI) or Global X NASDAQ 100 Covered Call ETF (NASDAQ:QYLD). So it’s no surprise to see them arrive in the Ether realm. Instead of waiting for a moonshot, investors can now profit from the chop.
Both ETTY and EHY do so by purchasing long Ether exposure through exchange-traded products (ETPs) and synthetic derivatives, and then adding short-term covered calls rolled weekly. The hybrid approach offers high distribution potential, flexibility in option premium management, and access to the broader Ethereum ecosystem, which serves as the backbone of much of the decentralized finance (DeFi) space.
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