MSTY: 100%+ Yield? Don't Fall For The Hype

Summary

  • MSTY offers an extremely high yield via aggressive covered call strategies on MicroStrategy, but this comes with significant downside risk and capped upside.
  • Despite MSTR's massive gains, MSTY has drastically underperformed its underlying due to its options approach, barely capturing any price appreciation.
  • MSTY exposes investors to all the downside of MSTR, especially given its Bitcoin risk, while limiting the potential for meaningful upside returns.
  • The high dividend yield does not compensate for the poor total return profile; I do not find MSTY to be an attractive investment choice.
  • Looking for a helping hand in the market? Members of Cash Flow Club get exclusive ideas and guidance to navigate any climate. Learn More »

Bitcoin vs dollars

J Studios

Article Thesis

YieldMax MSTR Option Income Strategy ETF (NYSEARCA:MSTY) is a covered call ETF that uses MicroStrategy Incorporated (MSTR) as a basis. MicroStrategy has performed extremely well over the last year on the back of

What Does Focusing On Cash Flow Get You?

At Cash Flow Club, we focus on businesses with strong cash generation, ideally with a wide moat and significant durability. When these companies are bought at the right time, that can be highly rewarding for us. If you are interested in joining our community, start right here!

This article was written by

52.63K Followers

Jonathan Weber holds an engineering degree and has been active in the stock market and as a freelance analyst for many years. He has been sharing his research on Seeking Alpha since 2014. Jonathan’s primary focus is on value and income stocks but he covers growth occasionally.

He is a contributing author for the investing group Cash Flow Club where along with Darren McCammon, they focus on company cash flows and their access to capital. Core features include: access to the leader’s personal income portfolio targeting 6%+ yield, community chat, the “Best Opportunities” List, coverage of energy midstream, commercial mREITs, BDCs, and shipping sectors,, and transparency on performance. Learn More.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of JEPQ either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

About MSTY ETF

SymbolLast Price% Chg
Expense Ratio
Div Frequency
Div Rate
Yield
Assets (AUM)
Compare to Peers

More on MSTY

Related Stocks

SymbolLast Price% Chg
MSTY
--