"At least one teenage Reddit user, it seems, is going all-in; according to a posting, he's investing his entire $9,300 account in shares of the ULTY ETF. He told the Reddit community that he's 17 years old and asked, "y'all think this is too risky?" He might get the last laugh if his account's value doubles or triples. On the other hand, even with its massive yield, there are drawbacks to the YieldMax Ultra Option Income Strategy ETF. Hopefully, he'll take some risk-mitigation measures to avoid potential problems down the road."
"An old saying in the financial markets says, "Know what you own." This leads us to the question of whether the 17-year-old Reddit poster really knows what's inside of the ULTY ETF. I just checked the holdings list of the YieldMax Ultra Option Income Strategy ETF and found that it holds stock shares and/or option positions on 21 stocks. That's a decent amount of diversification, but there's a high degree of risk involved because many of the stocks on ULTY's holdings list are fast movers."
A 17-year-old investor plans to put his entire $9,300 account into the YieldMax Ultra Option Income Strategy ETF (ULTY). ULTY offers a very large distribution yield but carries substantial risk because it holds stock shares and option positions on 21 companies. The holdings include volatile, fast-moving names such as IonQ, MicroStrategy (MSTR), Applovin, Reddit, Rocket Lab (RKLB), Affirm (AFRM) and Oklo. The ETF provides some diversification across positions but remains exposed to sharp price swings. Potential for large gains exists, but prudent risk-mitigation measures are advisable to avoid significant losses.
Read at 24/7 Wall St.
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