MSTY's $1.57 Monthly Payments Can't Offset Share Price Collapse

"The YieldMax MSTR Option Income Strategy ETF generates income by selling covered call options on MicroStrategy stock rather than collecting dividends from the underlying company. This structure means MSTY's monthly distributions depend entirely on option premium collection and MSTR's volatility-not on MicroStrategy's business fundamentals or cash flows. How the Income Mechanism Works MSTY holds approximately 59% of its assets in U.S. Treasury notes yielding 3.88% to 4.25%, providing stable collateral. The remaining portfolio consists of structured call spreads on MSTR-the fund sells call options to collect premiums while buying protective calls at higher strikes."

"When MSTR's stock price swings dramatically, implied volatility increases, allowing MSTY to charge higher premiums for the options it sells. This volatility-dependent model explains why the fund launched in February 2024 when MSTR's beta reached 3.43-more than three times the market's volatility. The challenge: MSTR dropped 53% over the past year, falling from $360 to $171, while the ETF itself declined 45% over the same period. Despite paying $18.86 in total distributions during 2025, MSTY investors holding since early 2025 experienced net losses when accounting for share price depreciation."

"MSTY's monthly payments have become erratic and declining. The fund paid an average of $3.57 per month in 2024 but only $1.57 per month in 2025-a 56% decrease. More concerning, the payment structure shifted from consistent monthly distributions to smaller, more frequent weekly payments starting in October 2025, with some as low as $0.14. This pattern suggests the fund struggles to generate sufficient premium income as MSTR's price collapsed. While MicroStrategy's extreme volatility theoretically benefits option sellers, the company faces significant headwinds: three separate securities fraud class action lawsuits alleging misrepresentation of Bitcoin strategy profitab"

MSTY generates income by selling covered call options on MicroStrategy (MSTR) rather than collecting company dividends. The fund holds about 59% of assets in U.S. Treasury notes yielding roughly 3.88%–4.25% as collateral and uses structured call spreads on MSTR, selling calls while buying protective calls at higher strikes. Distributions derive solely from option premiums and MSTR volatility, not MicroStrategy cash flows. MSTR plunged about 53% over the past year and MSTY fell about 45%, with distributions declining from an average $3.57 monthly in 2024 to $1.57 in 2025 and shifting to smaller weekly payments, raising sustainability concerns amid legal and business headwinds.

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