A proposed Bitcoin (BTC) fund would apply a separate, variable protection level to each options group, leaving shareholders without one portfolio-wide loss threshold as the groups begin at different times.
iShares Trust filed a registration statement amendment with the Securities and Exchange Commission on Oct. 19 for the iShares Bitcoin Managed Protection ETF. The proposed fund would use PBIT as its ticker.
For each tranche, the fund would typically seek a protection level near 90% of the reference asset’s value when it acquires the options. That would mean about 10% in initial maximum loss exposure for that tranche before fees and expenses, though the filing allows the level to vary.
Under the proposal, three options groups would generally run at once, each launched at a different point in the calendar quarter. A group would typically expire around the time another starts, at roughly monthly intervals.
The 10% figure applies at a tranche’s start. If the reference asset rises afterward, a decline back to the original protection level would exceed 10% from the intervening high. That describes the asset’s price movement, not PBIT’s return. The filing warns investors could lose part or all of their investment.
PBIT would use options on the iShares Bitcoin Trust ETF (IBIT) or options linked to comparable Bitcoin exposure; the fund itself would hold neither BTC nor Bitcoin exchange-traded products. It would generally buy a call at a lower preset level and sell one at a higher level. The bought call is intended to cushion losses; premiums from the sold call could offset costs but restrict gains above its strike. Interest from cash and fixed-income holdings could help absorb option costs or losses, though it would not guarantee protection. Fees and expenses would weigh on returns.
EconoTimes previously examined why the proposed fund would not give shareholders one fixed loss limit.
The filing provides for effectiveness 75 days after Oct. 19, but that period does not set a trading date. It names no listing exchange and gives no confirmed start date.
