Grayscale Files High-Income ETF Using Options on Its Zcash Fund

Grayscale has filed for The ZCSH High Income ETF, an actively managed strategy seeking current income while maintaining the potential for capital appreciation through indirect exposure to Zcash. The fund will not hold ZEC directly. Instead, it will primarily use options on Zcash ETPs, including Grayscale’s ZCSH, through a synthetic covered-call strategy. The fund will purchase calls and sell puts to create synthetic exposure to the underlying Zcash ETP, while also writing call options to generate premium income. The strategy can limit some upside participation when ZCSH rises above the strike price of the written calls. The fund intends to make bi-weekly distributions and will also hold short-term U.S. Treasuries and money market funds as collateral and an additional source of income.