The YieldMax MSTR Option Income Strategy ETF (NYSEARCA:MSTY) is famous among passive income collectors for its gigantic annual yield. How does MSTY manage to pay huge cash distributions and achieve triple-digit returns for investors, though?
It’s not magic, though there are sophisticated trading strategies involved. The good news is that you don’t have to be a trading expert to grasp the general idea of how the YieldMax MSTR Option Income Strategy ETF works.
With its monthly cash distributions and eye-catching annual yield, the MSTY ETF is truly reshaping passive income portfolios in the 2020s. After weighing the fund’s potential rewards and risks, you’ll be better prepared to decide whether the YieldMax MSTR Option Income Strategy ETF is appropriate for your investment plan.
MSTY ETF: The Basics
Just to recap, the YieldMax MSTR Option Income Strategy ETF is centered around Microstrategy (NASDAQ:MSTR | MSTR Price Prediction) stock. A well-known technology firm, Microstrategy holds large quantities of Bitcoin (CRYPTO:BTC).
Interestingly, the MSTY ETF doesn’t directly hold shares of Microstrategy stock. Instead, it “uses either a synthetic covered call strategy or a synthetic covered call spread strategy” to indirectly generate income from MSTR stock.
The YieldMax MSTR Option Income Strategy ETF uses these options-trading strategies to create substantial income. However, the drawback of these strategies is that MSTY is “subject to a limit on potential investment gains.”
In other words, Microstrategy stock could skyrocket but the YieldMax MSTR Option Income Strategy ETF’s share price would only increase by a limited amount. In some scenarios, the MSTY share price could decline sharply.
In light of this drawback, prospective investors might wonder how the YieldMax MSTR Option Income Strategy ETF could possibly have provided triple-digit returns in 12 months. This occurred even though the MSTY share price didn’t rise like the Bitcoin and MSTR stock prices did.
How MSTY Delivered Triple-Digit Returns
The key to profiting with the YieldMax MSTR Option Income Strategy ETF is consistently collecting the fund’s monthly distributions. Here’s a breakdown of MSTY’s cash distributions between August 8, 2024, and August 1, 2025 (the payable dates are shown here):
- August 8, 2024: $1.9405 per share
- September 9, 2024: $1.8541 per share
- October 25, 2024: $4.1981 per share
- November 22, 2024: $4.4213 per share
- December 20, 2024: $3.0821 per share
- January 17, 2025: $2.2792 per share
- February 14, 2025: $2.0216 per share
- March 14, 2025: $1.3775 per share
- April 11, 2025: $1.3356 per share
- May 9, 2025: $2.3734 per share
- June 6, 2025: $1.4707 per share
- July 7, 2025: $1.2382 per share
- August 1, 2025: $1.1835 per share
If we add up all of these distributions, we’ll get a total of $28.7758 per share. Now, let’s consider that the share price of MSTY was approximately $22.75 on August 8, 2024.
So, if someone had purchased the YieldMax MSTR Option Income Strategy ETF on August 8, he or she would enjoyed a return on investment of $28.7758 divided by $22.75, or roughly 126%, just based on the monthly cash distributions.
Granted, the MSTY share price declined by around 17% during those 12 months. That decline would include the fund’s annualized operating expenses of 0.99%, which are automatically deducted from the share price.
Even when we factor in the share-price loss, holding the YieldMax MSTR Option Income Strategy ETF would have provided a net return of at least 100%. Moreover, investing the cash distributions every month could have boosted the returns even further.
Don’t Assume Future Results With MSTY
The triple-digit net returns from the YieldMax MSTR Option Income Strategy ETF were quite impressive. Does this assure a similar performance over the next year, though?
YieldMax cautions, “Past performance does not guarantee future results.” That’s a fair warning to anyone who would hastily assume that the MSTY ETF will deliver 100% net returns over the next 12 months.
As of August 12, 2025, the YieldMax MSTR Option Income Strategy ETF advertises an expected annualized distribution rate of 79.35%. This number could change at any moment, so don’t conclude that it’s a fixed or guaranteed annual yield for MSTY.
And again, an investor’s net returns will be impacted by the 0.99% in annualized operating expenses as well as by any share-price declines that may occur. The point, then, is that the YieldMax MSTR Option Income Strategy ETF might deliver less-than-anticipated returns during the next 12 months.
Besides, both Bitcoin and Microstrategy stock performed extremely well over the past year. This scenario might or might not be repeated in the future.
Consequently, it’s wise to keep any positions in the YieldMax MSTR Option Income Strategy ETF down to just a few shares. Along with that precautionary measure, you can hope for another great year with MSTY but always be ready to exit your position if your investment goes awry.
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