TLDR:NEOS seeks SEC approval for a high-yield Ethereum ETF using options strategies on spot ETH ETFs.The ETF will use indirect exposure to Ethereum to generate higher returns at increased investment risk.Filing comes as ETH ETFs see heavy inflows, briefly outpacing Bitcoin ETF demand two weeks ago.NEOS already runs a similar Bitcoin ETF and aims to expand high-yield offerings to Ethereum.Ethereum ETFs are moving into riskier territory, and a new filing suggests this trend is far from slowing. NEOS has submitted plans for a high-income Ethereum ETF that aims to deliver elevated returns through an active options strategy. The move comes after a wave of institutional capital poured into ETH-based funds, increasing demand for specialized products. Bloomberg ETF analyst Eric Balchunas noted that Ethereum’s recent performance is giving the category “the full ETF treatment.”NEOS Filing: Ethereum ETFs Enter High-Yield, High-Risk TerritoryEthereum’s performance in recent weeks has attracted heightened interest from fund issuers. Two weeks ago, ETH ETFs outpaced Bitcoin ETFs in inflows, surprising traders and boosting market confidence. That momentum appears to have encouraged NEOS to expand its high-yield product line into the Ethereum space.The proposed ETF would not hold Ethereum directly. Instead, it would invest in existing spot ETH ETFs and generate returns by trading put and call options on them. This “synthetic covered call strategy,” outlined in NEOS’ SEC filing, is designed to maximize yields while accepting increased risk. The approach depends heavily on market volatility, where option premiums can provide consistent income streams.NEOS already operates a similar high-income Bitcoin ETF. Its decision to replicate the model for Ethereum reflects a belief that ETH has reached a level of liquidity and investor interest suitable for more complex financial products. As Eric Balchunas observed, growing inflows give managers more room to experiment with strategies beyond straightforward price tracking.New filing for an ethereum high income ETF. Now that the category is seeing big boy flows it will get the full ETF treatment. So many activities pic.twitter.com/DL3En9D1eo— Eric Balchunas (@EricBalchunas) August 11, 2025The fund’s risk profile is notably higher than traditional spot ETFs. Market swings can affect both the ETF holdings and the options positions, potentially magnifying gains or losses. While appealing to yield-focused investors, it is not aimed at those seeking a simple exposure to Ethereum’s market price.Institutional Demand Driving Product InnovationThe timing of NEOS’ filing aligns with Ethereum’s strong market run. Heavy inflows have created conditions where fund issuers see opportunity in targeting niche investor needs. The introduction of derivatives-based ETF strategies suggests a shift toward products designed to compete on yield rather than just asset exposure.Institutional investors are playing a central role in this evolution. Their capital provides the liquidity and stability needed for complex strategies to operate at scale. With ETH gaining ground on Bitcoin in trading activity, issuers are under pressure to diversify their offerings and capture market share.Whether the SEC will approve NEOS’ high-income Ethereum ETF remains uncertain. Regulatory considerations will weigh on the final outcome, but the filing alone signals a more confident and experimental phase for Ethereum ETFs. If greenlit, this fund could further expand the market’s range of high-yield, high-risk options. The post NEOS Files for High-Income Ethereum ETF as Market Heats Up appeared first on Blockonomi.