YieldMax TSLA Option Income Strategy ETF (TSLY) Covered Calls

The YieldMax TSLA Option Income Strategy ETF is an actively managed fund that seeks to provide high monthly income through a synthetic covered call strategy on Tesla, Inc. The fund does not invest directly in Tesla but uses financial instruments to create a synthetic long position while selling call options to generate premiums. It is designed for investors who want to harvest the high implied volatility of a leading electric vehicle maker in the form of consistent cash distributions.

You can sell covered calls on YieldMax TSLA 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 TSLY (prices last updated Fri 4:16 PM ET):

YieldMax TSLA Option Income Strategy ETF (TSLY) Stock Quote
Last Change Bid Ask Volume P/E Market Cap
33.62 +1.01 33.50 33.60 832K - 0.0
Covered Calls For YieldMax TSLA Option Income Strategy ETF (TSLY)
Expiration Strike Call Bid Net Debit Return
If Flat		 Annualized
Return If Flat
Feb 20 34 0.35 33.25 1.1% 26.8%
Mar 20 34 0.35 33.25 1.1% 9.3%
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Extended Business Description

YieldMax TSLA Option Income Strategy ETF is a specialized derivative-income vehicle that aims to generate substantial monthly payouts by capitalizing on the price swings of one of the world's most volatile mega-cap stocks. It is important to note that TSLY is not a direct investment in Tesla; rather, it is a synthetic strategy designed to transform the stock's "volatility risk premium" into tangible income for shareholders.

Core Strategy and Operations

  1. Synthetic Long Exposure: The fund creates a "synthetic" position that mimics the price movement of Tesla. This is achieved by purchasing at-the-money call options and simultaneously selling at-the-money put options. This combination allows the fund to participate in the stock's price action using only a fraction of the capital, with the remainder of the assets typically held in short-term U.S. Treasuries to earn interest.
  2. Covered Call Overlay: To generate income, the fund writes (sells) out-of-the-money call options on the same underlying stock. These calls usually have a duration of one month or less and are struck at prices 5% to 15% above the current market price. The premiums collected from these sales provide the primary source for the fund's high-yield distributions.
  3. Monthly Payouts and Risk: TSLY is famous for its high-frequency distribution schedule. However, because it sells away the "upside" beyond the strike price, the fund will likely trail the underlying stock during massive rallies. Conversely, while the collected premiums provide a small buffer, the fund still carries significant downside risk if the underlying stock price collapses.

Competitive Landscape

TSLY was a pioneer in the single-stock "yield-maxing" space and competes with a growing list of similar products. Its most direct competitors include the YieldMax COIN Option Income Strategy ETF and the YieldMax NVDA Option Income Strategy ETF. It also faces competition from leveraged bullish tools like the Direxion Daily TSLA Bull 2X Shares and the GraniteShares 2x Long TSLA Daily ETF. For investors seeking a broader tech-income approach, the REX FANG & Innovation Equity Premium Income ETF is a frequent alternative.

Strategic Outlook and Innovation

Management focuses on active strike selection to navigate the unpredictable news cycles surrounding the electric vehicle and autonomous driving sectors. By dynamically adjusting the "cap" on the portfolio, the fund seeks to maximize income without suffering excessive "NAV erosion" during flat or slightly bearish periods. In the 2026 market, TSLY remains a popular tool for income-seeking investors who believe the underlying stock will trade sideways or trend upward at a moderate pace. The fund carries a gross expense ratio of approximately 0.99% to 1.01%. As a non-diversified vehicle, it remains subject to high concentration risk, making it a tactical "income-booster" rather than a core portfolio holding.