SVOL - NVDY: Close To Impressing Me Risks Are Still Too Great

2024-05-09 08:25:42 ET

Summary

• YieldMax NVDA Option Income Strategy ETF fails to outperform the single stock it follows, Nvidia Corp.
• Despite underperformance, interest in NVDY has grown and assets under management (AUM) have reached over $450 million.
• NVDY's strategy involves buying short-term treasuries, creating a synthetic long position in NVDA, and selling calls against this position to generate income.
• Many risks are present in this fund and make its yield "too good to be true."

Introduction

YieldMax ETFs are known for a few things: single stock covered call exposure, massive yields, and failing to outperform the single stock they follow....

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