YieldMax MSTR Option Income Strategy ETF (MSTY) Covered Calls

The YieldMax MSTR Option Income Strategy ETF is an actively managed fund that seeks to generate high current income through a synthetic covered call strategy on MicroStrategy Inc. (MSTR). By utilizing a combination of standard and FLEX options, the fund provides exposure to MSTR’s price action while harvesting substantial premiums. In 2026, MSTY is recognized for its transition to a weekly distribution model, offering investors high-frequency cash flow from crypto-linked volatility.

You can sell covered calls on YieldMax MSTR Option Income Strategy ETF to lower risk and earn monthly income. Born To Sell's covered call screener gives you customized search capabilities across all possible covered calls but here are a couple of examples for MSTY (prices last updated Fri 4:16 PM ET):

YieldMax MSTR Option Income Strategy ETF (MSTY) Stock Quote
Last Change Bid Ask Volume P/E Market Cap
24.00 +4.37 24.00 24.18 2.9M - 0.0
Covered Calls For YieldMax MSTR Option Income Strategy ETF (MSTY)
Expiration Strike Call Bid Net Debit Return
If Flat		 Annualized
Return If Flat
Feb 20 24 0.35 23.83 0.7% 17.0%
Mar 20 24 0.60 23.58 1.8% 15.3%
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Extended Business Description

YieldMax MSTR Option Income Strategy ETF is a specialized derivative vehicle designed to monetize the extreme volatility of MicroStrategy Inc. (MSTR). As MSTR is the largest corporate holder of Bitcoin, it exhibits high implied volatility, which MSTY captures to generate outsized distributions. The fund does not own MSTR shares directly; instead, it uses a "synthetic" approach to replicate the stock’s performance and sell call options against that exposure.

Core Strategy and Operations

  1. Synthetic Covered Call Overlay: The fund creates synthetic long exposure by purchasing MSTR call options and selling MSTR put options with the same strike and expiration. It then writes (sells) short-term call options—typically 5% to 15% out-of-the-money—to collect premiums. This strategy caps the fund’s potential upside during massive rallies but provides a buffer and significant income during flat or moderately bullish phases.
  2. Transition to Weekly Distributions: A major shift in 2026 is the adoption of a weekly payout schedule. This allows shareholders to receive income 52 times per year, reflecting the fast-paced nature of the digital asset markets. As of early 2026, the fund maintains a staggering distribution rate, though it often includes a high percentage of Return of Capital (ROC).
  3. Collateral Management: MSTY holds the majority of its assets in U.S. Treasury bills and cash equivalents to serve as collateral for its options positions. This interest-bearing cushion helps offset the fund’s 0.99% expense ratio.

Competitive Landscape

MSTY is a leader in the single-stock "yield-maxing" space. Its primary competitors include the YieldMax COIN Option Income ETF and the YieldMax NVDA Option Income ETF. In 2026, it also faces competition from the Defiance 2X Long MSTR ETF for traders seeking leverage rather than income, and its own inverse counterpart, the YieldMax Short MSTR Option Income ETF. For broader crypto income, it is often compared to the Amplify Bitcoin 2% Monthly Option Income ETF.

Strategic Outlook and Innovation

In 2026, MSTY has evolved into a "yield-farming" staple for retail investors comfortable with high-beta crypto exposure. The fund’s management has refined its "Dynamic Cap" methodology, which seeks to preserve more of MSTR’s vertical moves by using credit spreads rather than simple naked calls during confirmed Bitcoin breakouts. However, the fund remains subject to "NAV erosion" if MSTR undergoes a prolonged downturn, as the income received may not fully offset capital losses. With a gross expense ratio of 0.99%, MSTY remains the premier high-frequency income tool for the "Bitcoin Standard" era, providing a regulated bridge for investors to turn corporate Bitcoin volatility into a weekly paycheck.