NVDY Sells NVIDIA's Best Days Each Month to Fund Its 60 Percent Distribution

NVDY sells call options tied to NVIDIA’s strongest upside moves each month and distributes the option premium as income. The fund uses a synthetic covered call structure, holding Treasuries and a partial direct stock position rather than a one-to-one share backing for each contract. The Treasuries provide interest, while layered short and long NVIDIA call options at different strikes and expirations collect premium and shape exposure. YieldMax shifted payouts from monthly to weekly in late 2025, with weekly distributions ranging from $0.0848 to $0.2072 per share. Recent distributions have been classified as income rather than return of capital. Over the past 12 months, NVIDIA returned 67% while NVDY returned 58% with reinvested distributions, narrowing the gap because NVIDIA’s gains arrived as a steady grind rather than sharp spikes that would hit short call strikes.

"NVDY uses a synthetic covered call structure. It writes options on NVIDIA while holding Treasuries and a partial direct stock position rather than a one-to-one share position behind every contract. The portfolio holds a complex mix of Treasuries, layered with several short and long NVIDIA call options at different strikes and expirations. The Treasuries earn interest, the synthetic structure tracks NVIDIA, and the short calls collect premium paid to shareholders. Think of it as renting out NVIDIA's ceiling."

"YieldMax shifted NVDY from monthly to weekly payouts late in 2025, and in 2026 the fund has paid weekly amounts ranging from $0.0848 to $0.2072 per share, all declared in a single January 7, 2026 announcement covering the year. Per YieldMax's May 2026 distribution composition, 100% of recent payouts have been classified as income rather than return of capital, which matters for taxes."

"Over the past 12 months, NVIDIA itself returned 67%. This is right before an earnings call and will likely change significantly. Anyhow, it does not matter, since NVDY will likely keep trailing. NVDY, even with distributions reinvested, returned 58% in a year. That gap is narrower than the marketing critique would suggest."

"Investors who held NVDY through this stretch got the bulk of NVIDIA's upside plus weekly checks, because NVIDIA's gains came in a steady grind rather than violent moonshots that would have slammed into the short call strikes. And that dividend reinvested figure isn't the"

Read at 24/7 Wall St.