Is MSTY’s 74.04% Yield Real or Just Wishful Thinking?

Key Points

The MSTY ETF’s large weekly cash payouts will undoubtedly tempt many Bitcoin bulls and Microstrategy enthusiasts.
However, caution is advised as MSTY’s share price has vastly underperformed Microstrategy stock.
Are you ahead, or behind on retirement? SmartAsset’s free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don’t waste another minute; get started by clicking here.(Sponsor)

Microstrategy (NASDAQ:MSTR), a software company that holds large amounts of Bitcoin (CRYPTO:BTC), doesn’t pay a dividend. However, there’s an exchange traded fund (ETF) called the YieldMax MSTR Option Income Strategy ETF (NYSEARCA:MSTY) which indirectly uses Microstrategy stock to generate dividend/distribution payments for investors.

If you’re bullish about Bitcoin and like to collect big cash payouts, it may be hard to resist the allure of MSTY’s gigantic yield. Yet, a deeper investigation will reveal that the YieldMax MSTR Option Income Strategy ETF is prone to risks and the sky-high yield could come with substantial costs.

Not a Traditional Dividend

First of all, prospective investors need to understand how the YieldMax MSTR Option Income Strategy ETF generates income. The cash payouts from MSTY aren’t traditional dividend payments like the ones you’d get from a blue-chip company such as Coca-Cola (

Instead, the YieldMax MSTR Option Income Strategy ETF derives its cash distributions partially from U.S. Treasury bonds, but mostly from options-trading strategies based on Microstrategy stock. More specifically, the MSTY ETF uses synthetic covered call strategies and/or synthetic covered call spread strategies.

The fund’s income-generating strategies are highly aggressive, and the currently advertised annual distribution yield for the YieldMax MSTR Option Income Strategy ETF is 74.04%. The fund deducts 0.99% worth of annual operating expenses from the share price, but obviously, MSTY’s massive distribution yield more than makes up for the operating fees.

Also, the YieldMax MSTR Option Income Strategy ETF pays out a cash distribution each and every week. This feature will make the MSTY ETF even more alluring to passive income hunters who happen to be bullish on Bitcoin and Microstrategy stock.

MSTY’s Major Limitation

Because the YieldMax MSTR Option Income Strategy ETF uses covered call and/or covered call spread strategies, the fund has notable limitations. These types of options-trading strategies can often put a “cap” or a limit on how high the share price can go.

So, let’s say the Bitcoin price skyrockets and this causes Microstrategy stock to shoot higher. Due to the fund’s options-trading strategies, the YieldMax MSTR Option Income Strategy ETF’s share price might only increase by a very limited amount.

And if Microstrategy stock falls sharply, don’t be too surprised if the YieldMax MSTR Option Income Strategy ETF also falls fast. Thus, in terms of share-price movement, MSTY might participate in all of the downside but only some of the upside of Microstrategy stock.

A head-to-head comparison will drive the point home. Microstrategy stock has gained 44% on a year-to-date basis in 2025 and an astounding 132% over the past 12 months.

Meanwhile, when we only focus on share-price action and not the cash distributions, MSTY has declined 19% year-to-date and fallen 29% during the past 12 months (according to Yahoo! Finance).

The point here is that investors could end up losing money from share-price erosion while earning income from MSTY’s weekly cash distributions. Depending on the time frame, you might actually be better off directly owning Microstrategy stock.

The Yield Is Real, but Tread Carefully

An additional cautionary note concerns the YieldMax MSTR Option Income Strategy ETF’s eye-catching distribution rate. It’s 74.04% today, but there’s no assurance that MSTY’s expected annual yield will stay that high in the future.

Indeed, the YieldMax MSTR Option Income Strategy ETF’s distribution rate is a moving target. Before investing in the MSTY ETF, you’ll definitely want to check the fund’s web page to see if the yield has changed recently.

All in all, I’d say that the YieldMax MSTR Option Income Strategy ETF’s yield is real at the moment when it’s advertised. Just keep in mind that the fund’s yield is subject to change at any given moment.

Then, consider the other risk factors associated with the YieldMax MSTR Option Income Strategy ETF. Bitcoin can be quite volatile, and so can Microstrategy stock and the MSTY ETF.

Furthermore, the YieldMax MSTR Option Income Strategy ETF deducts operating fees which will slightly drag on the share price. Along with all of that, MSTY’s options-trading strategies will tend to limit the fund’s potential share-price upside.

Consequently, it’s wise to only own a few shares of the YieldMax MSTR Option Income Strategy ETF if you choose to hold any at all. Just as importantly, be sure to monitor MSTY’s often-changing yield and share price, and always be ready to exit your position if necessary.

The post Is MSTY’s 74.04% Yield Real or Just Wishful Thinking? appeared first on 24/7 Wall St..

This content is courtesy of, and owned and copyrighted by, https://247wallst.com and its author. This content is made available by use of the public RSS feed offered by the host site and is used for educational purposes only. If you are the author or represent the host site and would like this content removed now and in the future, please contact USSANews.com using the email address in the Contact page found in the website menu.