Like Tesla but fear a correction? Innovator ETFs Trust is working on an ETF for you
Spencer Platt/Getty Images News

Innovator ETFs Trust intends to launch the Innovator Hedged Tesla ETF (TSLH), which will provide the investment community with a risk-managed investment approach to the share price of Tesla (NASDAQ:TSLA).
The exchange traded fund intends to invest approximately 80% of its assets in U.S. Treasury Bills with weighted average maturities of roughly three months. Simultaneously, the fund will employ an options overlay strategy with the remaining 20% of its assets.
According to the U.S. Securities Exchange Commission filing: 
âThe fund intends to implement a call option spread strategy through the purchase and sale of call options that reference TSLA with rotating expiration dates of approximately three months. The fund will seek to purchase âin-the-moneyâ call options at approximately 80% of the price of TSLA at the time of purchase. The fund will also seek to sell call options on TSLA and receive a premium which will be used to partially fund the purchased call option.â
When TSLA appreciates, the ETF aims to partake in the price return experienced by TSLA. However, if TSLA appreciates beyond the strike prices of the sold call option, in that case, the fund will not experience such an increase to the same extent.
By applying an options strategy, the ETF will look to acquire exposure to the price return of TSLA through purchased call options and sell the fundâs opportunity to benefit from increases in the value of TSLA beyond the strike price of the sold call options.
Tesla price action: -2.2% on the day, -11.8% YTD and +10.9% over a one-year trading period.
In other TSLA related news, Daiwa Capital Markets dropped its price target on the EV maker to $980 from $1,150. It warns chip availability could pose risks to near-term expectations.