YieldMax MSTR Option Income Strategy ETF

MSTY

Market cap $1.91B

YieldMax MSTR Option Income Strategy ETF (MSTY) offers high income via covered calls on volatile MSTR, but has suffered alongside MSTR's decline. MSTY's recent price drop is tied to MSTR's weakness and market volatility, not just NAV erosion, with distributions still attractive for income seekers. MSTY is best used as a small, aggressive allocation within a diversified income portfolio, not as a core holding due to its risk profile.

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It's tempting to think about throwing in the towel on an ETF that has so much negative momentum riding behind it.

YieldMax MSTR Option Income Strategy ETF offers an extremely high yield but carries significant risk and aggressive volatility due to its options-based strategy. MSTY's performance is closely tied to MicroStrategy shares, with a 1% drop in MSTR causing a 1.41% decline in MSTY, amplifying downside risk. Distributions are high but declining, driven by option premium income and capital return, which erodes the fund's net asset value over time.

YieldMax MSTR Option Income ETF has suffered significant declines alongside cryptocurrencies and Strategy Inc. MSTY's dividends have been sharply reduced recently, reflecting falling net asset value. Despite MSTY's high current yield, further dividend cuts are likely if NAV continues to drop.

MSTY adds unnecessary complexity to an already-risky Strategy investment by layering covered calls on top of leveraged Bitcoin exposure. Strategy itself is already riskier than Bitcoin because it uses debt and stock sales to amplify its cryptocurrency bets.

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YieldMax MSTR Option Income Strategy ETF offers exceptionally high yields but comes with significant capital risk and extreme volatility. MSTY uses synthetic exposure to MSTR via options, generating income through covered call strategies, without owning MSTR or BTC-USD directly. Despite a -54.9% decline in share price, MSTY has distributed income exceeding its price loss, appealing to aggressive income-focused investors.