COIW vs Selling Covered Calls on Coinbase Yourself

By Stephen Manning · @StephenCFU on X · 2025-09-02 · 8 min read

COIW does not sell covered calls. This guide compares it with CONY, ICOI and COII and lays out a weekly covered call plan on Coinbase with rolls and limits.

A practical plan for earning income from Coinbase (COIN) volatility, either by selling covered calls yourself or by holding an ETF. We compare Roundhill's COIN WeeklyPay ETF (COIW) with the funds that really do sell calls on COIN (CONY, ICOI and COII), show what COIW paid in mid-2025, and lay out a weekly covered call plan with rolls and limits.

COIW does not sell covered calls

COIW does not sell options, and Roundhill states plainly that its WeeklyPay funds do not sell calls (see the COIW fund page). The fund aims for about 1.2 times COIN's weekly total return, before fees and expenses, mostly through swaps, and it pays a distribution every week. That payout comes out of the fund's assets, not from option premium, and Roundhill's Section 19(a) notices estimated that some of its 2025 payouts were entirely return of capital: part of your own money handed back.

So COIW is close to the opposite of a covered call. A covered call gives up upside in exchange for premium; COIW gives you more of COIN's weekly move, in both directions, with no cap. Roundhill's Amazon fund is built the same way, and our look inside AMZW's income strategy covers the weekly reset and the costs in more detail.

COIW's weekly payouts, July to August 2025

This table shows what COIW paid per share in July and August 2025, from Roundhill's distribution history. It is a historical snapshot; check Roundhill's page for current amounts.

The smallest payout in this stretch was less than a third of the largest, so this is not a fixed coupon. On each ex-date the share price drops by about the amount paid, so what matters is whether total return keeps up.

Two paths to income from COIN

Path A: sell covered calls on COIN yourself

• Own 100 shares of COIN for each call you sell.
• Sell an out-of-the-money call each week and collect the premium as time decay works in your favor. In return, your upside is capped at the strike.
• This suits hands-on traders who can watch the position and manage it before expiry.

If the strategy is new to you, start with our guide to covered calls on stocks you own.

Path B: buy an ETF that sells calls on COIN

• CONY: YieldMax COIN Option Income Strategy ETF
• ICOI: Bitwise COIN Option Income Strategy ETF
• COII: REX COIN Growth & Income ETF

These funds pay distributions driven by option premium, and their upside is capped when COIN rallies hard. Here is how they line up against COIW and the do-it-yourself route.

Payout schedules (weekly or monthly) differ by fund and have changed since launch, so check each issuer's page. Judge all of them on total return, price change plus distributions, rather than headline yield: a big payout on a volatile stock often comes with a falling share price. Holders on r/YieldMaxETFs and r/dividends like the frequent payouts but argue about NAV erosion and whether the payouts can last. The same questions apply to the wider field of high-yield option income funds (see ULTY vs YMAX vs QDTE compared).

A weekly covered call plan on COIN

Setup

• Shares: 100 shares of COIN for each call (200 shares, two calls). Check Coinbase's investor page for the next earnings date.
• Expiration: weekly options, 7 to 10 days out, where time decay is fastest and COIN's high implied volatility keeps the premium meaningful.
• Strike: an out-of-the-money call around 15 to 20 delta. Delta roughly tracks the market's odds of the call finishing in the money, so a 0.18 delta call has about an 18% chance.
• Size and risk: a covered call is not defined risk. The premium cushions only a small drop; below your breakeven you lose on the shares like any owner. Hold only as much COIN as you are prepared to own through a deep drawdown. To cap the worst case so the trade fits our house rule of risking 1 to 2% of the account per trade, measured by max loss, buy a put below the stock, which turns the covered call into a collar.

Entries, rolls and exits

• Entry: sell the call when COIN is up on the day or after a green day, when calls are richer.
• Taking profits: if the call has lost 60 to 70% of its value with three or more trading days left, buy it back and sell next week's call. That is a new trade, not a roll.
• When COIN runs through the strike: if COIN trades 1 to 1.5% above the strike before Thursday, either roll once, up and out to a later expiry and a higher strike, for a net credit only, or let the shares be called away and buy back in later if you still want them. If COIN threatens the rolled call too, do not roll again: let the shares go or buy the call back. Our rule is one roll and done, or none. Remember an in-the-money call can be assigned before expiry. More in our guide to managing a covered call when the stock is above your strike.
• When COIN falls: you keep most or all of the premium, but the shares can lose far more. There is no stop on the short call, since the risk sits in the shares, so decide in advance how far COIN can fall before you sell them. Before selling the next call, check the strike against what you paid: a strike below your cost can lock in a loss on the shares if they are called away.
• Catalysts: COIN's implied volatility jumps ahead of earnings and Fed meetings and whenever bitcoin swings hard. The fatter premium pays for a bigger expected move, one that can carry COIN through your strike in a single session. Over those events, go further out of the money, cover fewer shares, or skip the week.

Worked example

A hypothetical example, not a trade we took. You own 100 COIN shares bought at $300 and sell a call 7 days out at the $330 strike, about 0.18 delta, for $3.00.

• Premium: $3.00 × 100 = $300, yours to keep whatever happens.
• COIN below $330 at expiry: the call expires worthless. You keep the $300 and the shares, and you can sell another call.
• COIN above $330 at expiry: the shares are called away at $330. You gain $3,000 on the shares plus the $300 premium; any rise above $330 goes to the call buyer.
• Breakeven: $297, your $300 cost less the $3.00 premium. If COIN drops 20% to $240, the shares lose $6,000 and the premium covers $300 of it.

To see the call CFU's rules land on for COIN today (21 to 45 days out, near 0.25 delta), try the free CFU Covered Call Scanner. Those rules use a longer expiration than the weekly plan above, so you trade less often.

What covered call research shows

• Index buy-writes, such as Cboe's BXM index on the S&P 500, have historically been less volatile than owning the index outright, with smaller drawdowns, at the cost of capped upside.
• AQR's global research on covered calls finds lower volatility than owning the market in stock markets around the world.
• Covered calls are not downside protection: a buy-write takes most of the market's fall but only part of its rise, as ProShares explains.

Those studies cover diversified indexes. COIN is a single stock tied to crypto prices, and its moves dwarf an index's, so the premium is a much thinner cushion here.

Risks, taxes and return of capital

• The trade-off: in a sharp COIN rally, a covered call, or a fund that sells calls, can trail plain buy-and-hold badly, and in a sharp drop it still takes most of the fall.
• Leverage: COIW and COII magnify COIN's swings in both directions, and COIW's weekly reset tends to hurt in choppy markets.
• Return of capital: for US taxpayers, a return-of-capital distribution is generally not taxed when paid, but it lowers your cost basis, which can mean a larger taxable gain when you sell.
• Assignment is a sale: when your shares are called away in a taxable account, that sale can trigger capital gains tax. Check the tax side with a professional.
• Crypto link: COIN tends to move with bitcoin, so a crypto selloff hits the shares and every fund in this post at once.

Putting it all together

1. Choose your lane: sell covered calls yourself for control, or buy a fund for convenience.
2. Know your wrapper: COIW is leveraged COIN exposure with a weekly payout from fund assets, not a covered call fund.
3. Keep a system: a weekly cadence, 15 to 20 delta strikes, and one roll and done, or none.
4. Measure total return: track price change plus payouts against simply holding COIN.

If 100 shares of COIN is more than your account can carry, our guide to trading options for weekly income on a small account covers smaller ways in, and our rundown of the options strategies retail traders use most compares the alternatives.

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Filed under: Covered Calls, Crypto, Income Strategies

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