"In 2022, YieldMax pioneered and premiered its first of a menu of single stock covered call ETFs: an ETF tracking Tesla, ticker: TSLY. Soon, a number of others followed, including the rest of the Magnificent 7 stocks and other volatile ones, such as Strategy Inc. (formerly MicroStrategy) (NASDAQ: MSTR). The YieldMax MSTR Option Income Strategy ETF (NYSEARA: MSTY) is their ETF, which has garnered a sizable following due to Strategy's unusual setup: it's a technology stock that owns roughly $70 billion worth of Bitcoin (BTC) - worth far more than its intrinsic software business and sales."
"Since launching in February 2024, MSTY has delivered an annual 196.46% return and a 336.59% cumulative return. However, since mid-July, MSTY has been in a tailspin, dropping from $22.96 to the $16.53 - $17.33 range at the time of this writing. Needless to say, this has caused a large segment of MSTY shareholders to go into panic mode."
YieldMax launched single-stock covered-call ETFs starting in 2022 with TSLY and expanded to include volatile names like Strategy Inc. The YieldMax MSTR Option Income Strategy ETF (MSTY) synthetically tracks Strategy stock using US treasuries and mixed long/short call and put positions. Strategy's roughly $70 billion in Bitcoin holdings exerts greater influence on the stock than its software earnings. MSTY returned 196.46% annual and 336.59% cumulative since February 2024, but it declined sharply from $22.96 to about $16.53–$17.33 since mid-July. Some shareholders panicked while others doubled down, viewing MSTY as an income and Bitcoin-correlated play.
Read at 24/7 Wall St.
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