by Investment firm YieldMax has applied to launch an ETF allowing investors to earn monthly yields on MicroStrategy shares.
A specialized exchange-traded fund (ETF) firm, YieldMax, has filed 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 based on shares in MicroStrategy, slated for release sometime in 2024.
If approved by the SEC, the ETF will trade under the ticker “MSTY” — just one letter off MicroStrategy’s preexisting ticker “MSTR.”
Yieldmax’s pending ETF utilizes a “synthetic covered call” strategy,
which involves a mix of buying call options and selling put options to earn revenue.
These proceeds are distributed to holders of the MSTY ETF as monthly payouts.
Notably, the ETF will never own any spot holdings of MicroStrategy shares, exclusively generating
income by trading MSTR derivatives. To decrease potential losses,
the fund limits its upside exposure to a 15% gain on the call options each month.
Yieldmax says the monthly yields generated by the ETF aren’t directly dependent
on the growth of MicroStrategy shares, meaning that investors would still earn yields on the ETF even if MicroStrategy stocks were to take a significant hit.
Several commentators on X (formerly Twitter) questioned why someone would
choose to invest in such an ETF instead of just buying the company stock or its options directly.
