Investment Firm Floats Yield-Bearing ETF Based On MicroStrategy Stock
Investment firm floats yield-bearing ETF based on MicroStrategy stock

YieldMax’s Option Income Strategy ETF

YieldMax, a specialized exchange-traded fund (ETF) firm, is looking to launch the first yield-bearing ETF product based on shares in Michael Saylor’s Bitcoin holding company, MicroStrategy. According to a Dec. 7 filing with the United States Securities and Exchange Commission (SEC), YieldMax has officially applied to launch its Option Income Strategy ETF, which would be traded under the ticker “MSTY”, just one letter off MicroStrategy’s preexisting ticker “MSTR”.

If approved by the SEC, the ETF product will use a “synthetic covered call” strategy, a mix of buying call options and selling put options to earn revenue. These proceeds are then distributed to holders of the MSTY ETF as monthly payouts.

YieldMax’s Option Income Strategy ETF is the latest product to join the stock market, with the potential to be big in crypto. It is also the first of its kind in the United States, offering a unique crypto ticker and a product that could be big for crypto. Apple and crypto have also been exploring the potential of the crypto stock market, and the MSTY ETF could be a major development in the crypto stock today.

Investing in Yieldmax ETFs

The Yieldmax ETF does not own any spot holdings of MicroStrategy shares, but instead earns income through trading MSTR derivatives. To protect against potential losses, the fund has implemented a 15% gain limit on the call options each month.

Yieldmax states that the monthly yields generated by the ETF are not directly impacted by the growth of MicroStrategy stocks, meaning investors can still earn yields even if the stock takes a hit.

Many people on X (formerly Twitter) have wondered why they would choose to invest in the ETF rather than buying the company stock or its options directly.

Yield-bearing ETFs are often marketed to conservative investors who want to get slightly higher returns from the most volatile parts of the stock market. With the gain limits imposed by the fund managers, these ETFs can be seen as a cautious yet potentially profitable way of generating passive income from big swings in stock or other crypto ticker prices. Products and Big Gains in 2023

YieldMax offers a wide selection of 18 ETF products for tech giants such as Tesla, Apple and Nvidia.

MicroStrategy shareholders have seen remarkable growth this year, with their stock prices soaring more than 290% since January 1, according to TradingView data.

On November 30, MicroStrategy co-founder Michael Saylor revealed that the company had acquired an additional 16,130 BTC for approximately $593.3 million — an average of $36,785 per Bitcoin (BTC).

As of November 29, MicroStrategy holds a total of 174,530 BTC, worth roughly $7.6 billion at the time of writing.

Categorized in:

Tagged in: