Wall Street’s Highest Yielding ETFs Pay Over 50 Percent on Nvidia and Tesla. Here’s What They Don’t Tell You

YieldMax NVDA Option Income Strategy ETF (NYSEARCA:NVDY), YieldMax MSTR Option Income Strategy ETF (NYSEARCA:MSTY), and YieldMax COIN Option Income Strategy ETF (NYSEARCA:CONY) marketplace organisation rates that wide 50% and, successful 1 case, apical 188%. Those payouts are real. The question is what the money gives up to nutrient them and whether the full instrumentality matches the advertised yield. Twelve-month terms information for MSTY and CONY suggest it often does not, portion NVDY has held together. A diversified adjacent similar the JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ:JEPQ) offers a utile examination of what a covered telephone operation looks similar erstwhile the underlying scale is dispersed crossed aggregate tickers alternatively than concentrated successful a azygous ticker.

How the YieldMax Machine Works

Each money takes a synthetic agelong presumption successful its people banal and past sells short-dated telephone options against that exposure. The premiums collected money play distributions. Portfolios are mostly backed by Treasury bills arsenic collateral. CONY reports astir 92% of its nett assets successful T-bills, and NVDY holds 20.6% successful Treasury securities, alongside its nonstop 11.5% involvement successful NVIDIA and a ladder of telephone options.

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Two structural features are worthy flagging here. Short calls headdress upside erstwhile the underlying banal rallies past the strike, truthful the money captures lone a portion of a large move. When premiums shrink, immoderate distributions are classified arsenic a instrumentality of capital, meaning the money returns shareholders' main alternatively than paying from concern income. MSTY's July 2026 organisation was disclosed arsenic astir an 8% instrumentality of capital.

NVDY: The One That Held Up

The standout among the 3 funds has been NVDY. Shares commercialized adjacent $12, up 15% implicit the past twelvemonth and 7% year-to-date connected a total-return basis. Recently, the organisation complaint has been successful the 14.7% range, and the money has done what the selling brochure promises: wage income without eroding principal.