I’ll admit it — I did a crazy thing this year. I went full YOLO (You Only Live Once) and bought $170,000 worth of the YieldMax Ultra Option Income Strategy ETF (NYSEARCA:ULTY), a high-risk but potentially highly rewarding exchange traded fund (ETF).
YieldMax has a lengthy menu of high-yielding ETFs, and ULTY has one of the most jaw-dropping annual dividend/distribution rates I’ve ever seen. I’m a fan of funds that offer big cash payouts, but I definitely wondered if I went too far with YieldMax’s Ultra Option Income Strategy ETF.
Right now, I’ll tell you exactly what happened so you can decide for yourself whether this fund is worth the risk. Hopefully, you can take some valuable lessons from my heart-stopping experience with the ULTY ETF.
I Should Have Read the Fine Print
Whenever you’re considering buying an ETF, always read the company’s website and the fund’s prospectus. That’s an essential principle that I completely disregarded in my greedy quest for gargantuan yield.
For what it’s worth, I did read the top part of the website for the YieldMax Ultra Option Income Strategy ETF. It advertised a jaw-dropping distribution rate (i.e., annual cash distribution yield to the shareholders), which currently stands at 84.23%. Not only that, but ULTY pays out a distribution every week.
So, I dug deep into my life savings. Specifically, I purchased 27,598 shares of the YieldMax Ultra Option Income Strategy ETF on the first trading day of June 2025, which was June 2.
At $6.16 per share, I ended up paying $170,003.68 for that massive ULTY position. With no guarantee whatsoever that the distribution rate would stay at around 84%, I had visions of nearly doubling my money in a year’s time.
At that time, I didn’t bother to read the prospectus. It pointed out that the YieldMax Ultra Option Income Strategy ETF deducts annual operating expenses totaling 1.3% of the share price (after a fee waiver).
Even if I had read about the operating fees, this still wouldn’t have stopped me from going bananas with my ULTY investment. After all, the fund’s massive yield would more than make up for the fees, and I just wasn’t in any mood to read the fine print.
Not Much Diversification Here
If I had read the details more closely, I would have discovered that the YieldMax Ultra Option Income Strategy ETF generates its huge yield from the performance of a handful of stocks and from options-trading strategies. Looking even further into the matter, it’s apparent that the ULTY ETF isn’t a highly diversified fund.
Upon a recent viewing of the YieldMax Ultra Option Income Strategy ETF’s holdings, I discovered that they include share and/or option-contract positions on 15 to 30 underlying securities based on high implied volatility.
Three of which are Advanced Micro Devices stock is fairly stable, but the stocks of Applied Optoelectronics and Applovin have been quite volatile at times. And frankly, I wasn’t prepared to link the performance of my $170,000 ULTY investment to AAOI stock and APP stock, of all things.
In other words, there’s not much diversification with the YieldMax Ultra Option Income Strategy ETF and its holdings look like they could be very risky. Nevertheless, I held my ULTY share position and hoped that the weekly cash distributions would make up for any potential share-price drawdowns.
So, Here’s What Happened
From June 2 until July 18, I collected exactly seven weekly cash distributions from the YieldMax Ultra Option Income Strategy ETF. Each payment was close to $0.10 per share, so the distributions amounted to roughly $0.70 per share.
Multiply that by 27,598 ULTY shares, and the cash payments totaled approximately $19,318.60. That’s not a bad haul for seven weeks, I’ll admit.
As for the share price, it wobbled between $6 and $6.45 during those seven weeks. When I sold my shares on July 18, ULTY traded at $6.39; my purchase price was $6.16 per share, so I pocketed $0.23 per share or $6,347.54 from the share-price appreciation.
Thus, my profit was $6,347.54 from the share-price appreciation plus around $19,318.60 from the weekly cash distributions, for a total of $25,666.14. From that, you might assume that I’m bullish about the YieldMax Ultra Option Income Strategy ETF and would want to stay in the trade forever.
Better Safe Than Sorry
Instead, I sold my full position and will stay away from the ULTY ETF for a while. The main reason is that the YieldMax Ultra Option Income Strategy ETF isn’t broadly diversified and I’m not super-confident about AAOI stock and APP stock.
Furthermore, I noticed that the ULTY share price was around $9 at the beginning of 2025, and it was close to $12.50 a year ago. Currently trading at $6 and change, the YieldMax Ultra Option Income Strategy ETF has lost a lot of share-price value over the long term.
To conclude, I’d rather be safe than sorry and for me, the YieldMax Ultra Option Income Strategy ETF’s risks outweigh its benefits. I got lucky with a short-term $170,000 ULTY trade, but now I’ll put my investable capital into something safer.
Editors Note: A previous version of this article claimed the fund only held 3 securities which it typically holds 15 to 30 securities.
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