MSTY’s 90% Yield Could Tempt Income Investors — Should You Bite?

In the 2020s, passive income harvesters who happen to be bullish about cryptocurrency are raving about a game-changing exchange traded fund (ETF). It’s called the YieldMax MSTR Option Income Strategy ETF (NYSEARCA:MSTY), and this fund could easily tempt you with its jaw-dropping yield and frequent cash payouts.

Maybe you’re prepared to take big risks with the MSTY ETF, or perhaps you’d prefer to take a more conservative approach with this fascinating fund. Either way, you’ll definitely want to consider the pros and cons of the YieldMax MSTR Option Income Strategy ETF. We’ll dive into that topic right now so you can decide whether to take a bite of MSTY or just steer clear.

What Makes MSTY So Tempting?

The gist of the YieldMax MSTR Option Income Strategy ETF is that it uses options-trading strategies to extract passive income from Microstrategy (NASDAQ:MSTR) stock. That’s noteworthy because Microstrategy stock doesn’t pay any dividends/distributions while the MSTY ETF does provide cash payouts.

The world’s most popular cryptocurrency, Bitcoin (CRYPTO:BTC), often tends to be volatile. Since Microstrategy holds large quantities of Bitcoin, it makes sense that Microstrategy stock can also be volatile.

To put it simply, the YieldMax MSTR Option Income Strategy ETF uses covered call option trading strategies to indirectly generate income from the volatility of Microstrategy stock. As the fund’s prospectus explains, the MSTY ETF “uses either a synthetic covered call strategy or a synthetic covered call spread strategy” to produce income.

How much income? As of August 26, 2025, the YieldMax MSTR Option Income Strategy ETF advertised an annualized distribution rate of 90.88%. This seems to suggest that investors could possibly double their money in a year’s time with MSTY.

Furthermore, the YieldMax MSTR Option Income Strategy ETF is enticing because it pays out its cash distributions on a monthly basis. That’s more frequent than the many ETFs that only pay a dividend/distribution once every three months.

Here’s What Can Go Wrong

At this point, you may be excited about the 90%+ advertised yield of the YieldMax MSTR Option Income Strategy ETF. Be aware, though, that YieldMax doesn’t guarantee that this ultra-high yield will persist into the future. At any time, YieldMax might reduce the distribution rate of the MSTY ETF. 

Plus, even if the YieldMax MSTR Option Income Strategy ETF continues to offer a sky-high distribution rate and monthly cash payments, the fund’s share price might not be stable. First of all, MSTY automatically deducts 0.99% worth of annualized operating expenses from the share price; this will undoubtedly reduce investors’ profits over the long term.

In addition, while the covered call option trading strategies of the YieldMax MSTR Option Income Strategy ETF will produce income, they will also tend to limit the upside potential of the fund’s share price. Thus, it’s entirely possible that Bitcoin and Microstrategy stock could zoom higher but the MSTY share price only rises slightly.

In some circumstances, the YieldMax MSTR Option Income Strategy ETF’s share price could fall sharply. A case in point would be the past 12 months (as of August 26, 2025), in which Bitcoin and Microstrategy stock gained substantial value but the share price of the MSTY ETF declined by 32.68%.

Hence, YieldMax acknowledges that its MSTR Option Income Strategy ETF is “subject to a limit on potential investment gains.” The fund’s tempting yield and frequent distributions aren’t risk-free as MSTY’s investors might be disappointed if their shares lose value.

Should You Take a Bite of MSTY?

At the end of the day, it’s fine to take a small bite of the YieldMax MSTR Option Income Strategy ETF as long as you don’t go overboard. The fund’s advertised yield isn’t assured for the future and its share price could erode substantially, so any position in MSTY ought to be very small.

Also, if you choose to take a bite-sized position in the YieldMax MSTR Option Income Strategy ETF, be sure to monitor the yield and the share price. These are subject to changes that may affect your portfolio’s bottom line.

Finally, you should only consider owning the YieldMax MSTR Option Income Strategy ETF if you’re optimistic about Bitcoin and Microstrategy stock. The MSTY ETF is indirectly connected to these assets, and it’s important to believe in your investments and be ready for whatever outcomes may occur.

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