65% Yield from the YieldMax MSTR Option Income Strategy ETF (MSTY): Is It Real?

"As you would surely guess from its name, the YieldMax MSTR Option Income Strategy ETF ( NYSEARCA:MSTY) is based on Strategy stock. The fund doesn't directly hold shares of MSTR stock, though; instead, it approximates share ownership through synthetic option trading strategies. Since the MSTY ETF effectively replicates ownership of Strategy shares, the fund is able to derive income by selling covered call options and/or call option spreads."

"That's right: the MSTY ETF pays out cash distributions on a weekly basis, which is a nice feature of this fund. Not only that, but the YieldMax MSTR Option Income Strategy ETF currently advertises a gigantic 64.53% annualized distribution rate. That's hard to resist, but be aware that YieldMax doesn't guarantee the MSTY ETF's distribution yield for the future. It can be cut on any given day, whether it's tomorrow or next month or a year from now."

The YieldMax MSTR Option Income Strategy ETF (MSTY) replicates exposure to MicroStrategy (MSTR) using synthetic option trading rather than direct share ownership. The fund generates income by selling covered call options and call option spreads, allowing it to pay weekly cash distributions to shareholders. MSTY currently advertises a 64.53% annualized distribution rate, producing large periodic payouts. Distribution levels are not guaranteed and can be reduced at any time. The ETF combines MSTR-like price exposure with option-derived income, while exposing holders to option-related risks, potential capital losses, and dependence on MSTR price behavior for returns.

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