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4 days ago
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GameStop Covered Call ETF Debuts Amid Meme Stock Resurgence
The first options-based income ETF tied to GameStop Corp. (GME) launched today, expanding the rapidly growing category of single-stock covered call funds. The Bitwise GME Option Income Strategy ETF (IGME) aims to generate high yields by writing covered calls on shares of GameStop, giving up some upside in exchange for option premium income. The fund, which charges an expense ratio of 0.98%, fell 2.1% in afternoon trading. IGME is just the second ETF tied to the meme stock, following the T-REX 2x Long GME Daily Target ETF (GMEU), a leveraged product that launched in April and has quickly grown to $17 million in assets under management. While most single-stock ETFs have focused on leveraged and inverse strategies, covered call funds have also gained significant traction, especially on volatile names with cult-like retail followings. The YieldMax suite has been particularly successful. The YieldMax TSLA Option Income Strategy ETF (TSLY) has amassed $1.2 billion in assets, while the YieldMax MSTR Option Income Strategy ETF (MSTY) now commands a massive $4.8 billion, despite launching just over a year ago. These funds sell call options to generate yield, offering investors eye-popping monthly income streams. But the strategy comes with a trade-off: capped upside and continued exposure to downside risk. If the stock surges, covered call ETFs miss out on most of the gains. If it drops, they still feel the pain, just slightly cushioned by the income. That trade-off hasn't worked out well lately. MSTY is up 109% over the past year, trailing Strategy Inc.'s (MSTR) 149% gain. TSLY has climbed only 39%, while Tesla Inc. (TSLA) jumped 94% over the same period. Still, investors continue to pile in, lured by the big yields and the simplicity of the strategy. Issuers, in turn, are capitalizing on the demand. Like IGME, the YieldMax funds charge hefty fees of around 1%. The GameStop ETF is a curious move for Bitwise, a firm best known for its crypto-focused lineup. On the surface, a fund tied to a video-game-retailer-turned-meme-stock doesn't quite fit. But there is a crypto connection. Like MicroStrategy before it—once a software firm, now essentially a Bitcoin holding company—GameStop appears to be following a similar playbook. The company recently disclosed it had purchased over $500 million worth of Bitcoin, adding another layer of volatility and intrigue. Bitwise cited the move as part of its rationale for launching IGME, saying, 'GameStop's return potential, historically high volatility, and recent adoption of bitcoin as a treasury asset make it a compelling choice for a covered call strategy.' Time will tell if IGME catches fire. For now, retail enthusiasm for GameStop—once the face of the meme-stock movement—has waned and shifted toward names like Strategy and Palantir Technologies Inc. (PLTR). But with options premiums still elevated and yield-chasing still very much alive, GameStop may yet find a second life in the ETF | © Copyright 2025 All rights reserved Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
06-06-2025
- Business
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Traders Buy the Dip in TSLL as Tesla Stock Tanks
Shares of Tesla Inc. (TSLA) plunged 14% on Thursday in a brutal session that sent shockwaves through the leveraged Tesla ETF universe. The Direxion Daily TSLA Bull 2X Shares (TSLL) dropped a whopping 28.5% during the session, its second-worst day ever. You might expect investors to flee after a wipeout like that, but instead, they piled in. A combined $140 million flowed into the 18 U.S.-listed Tesla-focused ETFs on Thursday. Nearly all of that went into TSLL, which hauled in $142 million despite its double-digit drop. The surge in assets suggests dip-buyers are doubling down on the long side, betting on a rebound in Tesla shares. TSLL has now seen a whopping $3.1 billion in inflows year to date, bringing its total assets to just over $4 billion. That's down from a peak of more than $7 billion in May, reflecting steep price losses. So far this year, TSLL is down 60%, more than double Tesla's 25% decline. Far behind in Thursday's inflows tally was the YieldMax TSLA Option Income ETF (TSLY), which pulled in $6 million. That brought its year-to-date inflows to $514 million and pushed its total assets to $950 million, making it the second-largest Tesla ETF in the U.S. TSLY sells covered calls on Tesla stock to generate income, trading upside potential for monthly yield. While that strategy cushions some downside, the ETF is still heavily exposed to Tesla's share price. Year to date, the fund is down 21%, a bit better than Tesla's 25% slide. Interestingly, the big winner on Thursday—the Tradr 2X Short TSLA Daily ETF (TSLQ), which gained nearly 29%—lost assets. Investors pulled $2.5 million from the bearish fund, suggesting traders weren't eager to press short bets after the drop. Still, TSLQ has taken in $255 million so far this year and now manages around $480 million, making it the third-largest Tesla-focused | © Copyright 2025 All rights reserved Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
19-05-2025
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High-Yield ETFs: Big Payouts, Bigger Trade-Offs?
While a significant amount of money continues to flow into low-cost, plain-vanilla ETFs, the ETF universe is becoming increasingly complex. Most new ETFs being launched are actively managed, and many make use of derivatives. Two recent regulatory changes—the 'ETF Rule' and the 'Derivatives Rule'—have made it easier for providers to launch ETFs and incorporate derivatives into their strategies. The explosion in derivative-backed ETFs has been particularly striking. Most of these new derivative-based ETFs fall into one of three categories: Buffer or defined outcome ETFs Leveraged or inverse single-stock ETFs Option-based income ETFs Some of the newest products even combine options-selling strategies with leveraged single-stock ETFs. (See: Buffer ETFs Attract Billions as Investors Seek Shelter from Market Turmoil) This article takes a closer look at ETFs that trade options on single stocks to generate exceptionally high yields—among the hottest-selling funds in the market today. Thanks to their eye-catching distribution rates, these funds are generating significant buzz on social media. However, they generally underperform the underlying stocks, even as they continue to attract assets from investors drawn to their lucrative monthly payouts. We analyzed the performance of 24 single-stock covered call ETFs in the YieldMax suite from their respective inception dates. We focused on YieldMax because it is the clear leader in this niche, significantly ahead of competitors despite a recent surge in similar offerings. Many of YieldMax's ETFs launched in 2023—providing a limited, yet more substantial, performance history compared to most rivals, which are even newer. Despite their eye-popping distribution rates, these products tend to underperform on a total return basis due to steep declines in share price. Of the 24 YieldMax ETFs we examined, only two managed to slightly outperform their respective underlying stocks. Option Income ETFs: How the Strategy Works YieldMax currently offers 48 ETFs in U.S. markets, with total assets under management of over $10 billion. Though relatively new—the oldest, TSLY, debuted in November 2022—the suite has grown rapidly, largely driven by its headline-grabbing distribution yields of 100% or more. Inspired by this success, many copycat ETFs have entered the market. According to the provider, the primary investment objective of these funds is to seek current income; the secondary objective is to seek exposure to the price movement of the underlying stock, subject to a cap. These funds do not actually hold the underlying stocks. Instead, they gain synthetic exposure by taking long positions in call options and short positions in put options. They also hold Treasury securities for collateral and additional income. To generate monthly income, the fund manager sells call options against the synthetic long position. These calls typically have expirations of one month or less and strike prices about 0%–15% above the current share price. In some cases, managers use covered call spread strategies to further enhance yields. The YieldMax Reddit community has around 44,000 members, many of whom discuss using these ETFs to replace their 9-to-5 jobs or to generate retirement income. The four most popular products in the suite are linked to some of the hottest and most volatile stocks. The inherent volatility of these stocks leads to higher option premiums—and higher potential income. Each of these ETFs has gathered over $1 billion in AUM. Yields are calculated by annualizing the most recent monthly payout and dividing it by the fund's latest NAV. However, yields can vary significantly from month to month as income from selling options depends on fluctuations in the underlying stock, implied volatility, and other factors. Performance Since Inception We analyzed the total return—including distributions—of YieldMax ETFs from their inception versus their respective underlying stocks. Some stocks surged, some declined, and others remained relatively flat—but in all cases except those tracking PayPal PYPL and Marathon Digital MARA, the ETF underperformed the stock. For the four most popular products, the performance gap was substantial—showing that investors may be leaving a lot of money on the table in pursuit of yield. YieldMax MSTR Option Income Strategy ETF (MSTY) The most popular product in the suite celebrated its one-year anniversary in February and now boasts $4 billion in assets. It is also the highest-yielding single-stock ETF in the lineup, offering a distribution rate of 136%. Since inception, it has delivered a total return of 286%, while MSTR stock has surged 457% during the same period. Image Source: Zacks Investment Research Once a little-known, money-losing software firm, Strategy MSTR has become the largest corporate holder of bitcoin and now trades like a leveraged bet on the cryptocurrency. Its stock commands a significant premium over the value of its bitcoin holdings. Some experts believe the financial engineering behind MSTY—and the premium valuation—may be unsustainable. If you're bullish on bitcoin, why not consider the iShares Bitcoin Trust IBIT, which charges just 0.25% and closely tracks the price of the asset? TSLA Option Income Strategy ETF (TSLY) The oldest product in the suite holds $1.2 billion in assets. Since its debut in November 2022, the ETF has gained approximately 22%—significantly underperforming Tesla TSLA shares, which are up about 102% over the same period. It has also lagged the S&P 500 and Nasdaq-100 indexes, which have gained 53% and 85%, respectively. Image Source: Zacks Investment Research For context, low-cost index funds like the SPDR Portfolio S&P 500 ETF SPLG and Invesco NASDAQ 100 ETF QQQM charge just 0.02% and 0.15% in fees, while most option income products charge close to 1%. TSLY currently boasts a striking yield of nearly 107%. NVDA Option Income Strategy ETF (NVDY) The second most popular product in the family has generated a total return of about 187% since its inception in May 2023. However, shares of the AI darling NVIDIA NVDA have risen approximately 372% over the same period. Still, the ETF has attracted $1.3 billion in assets. Image Source: Zacks Investment Research YieldMax COIN Option Income Strategy ETF (CONY) CONY, which tracks Coinbase COIN—a major beneficiary of bitcoin's rise—has returned 120% since its debut in August 2023. Over the same period, COIN stock has gained about 209%. The ETF currently sports a yield of 97% and has about $1.1 billion in assets. Image Source: Zacks Investment Research Single-Stock Option Income ETFs vs. Diversified ETFs These ETFs sell one-month call options with strike prices slightly above the current stock price. In doing so, investors give up much of the upside if the stock rises while still bearing most of the downside if the stock falls—creating an asymmetric risk-reward profile. By contrast, the JPMorgan Equity Premium Income ETF JEPI—which helped launch the covered call trend—uses a bottom-up fundamental process to construct a diversified, defensive portfolio of about 125 stocks. (Read: What's Behind the Surge in Options Income ETFs?) The fund then sells out-of-the-money S&P 500 index call options to generate monthly income. This portfolio doesn't experience the outsized moves seen in names like Strategy or Coinbase, which explains why the performance shortfall may not be too striking. Bottom Line You should only invest in a fund tied to a single stock if you're bullish on that specific name—in which case, you're generally better off owning the stock directly. If you expect the stock to decline, it's best to steer clear of any product linked to it. These ETFs may outperform if the underlying stock remains range-bound. However, since they use market swings as an income-generating strategy, don't expect jumbo distributions. If you're drawn to high monthly income and can accept an asymmetric risk-reward profile—as well as potentially unfavorable and inconsistent tax treatment—these funds may still appeal to you. ETFs have democratized access to markets, and innovation in the space has been remarkable. But with complex products like these, it's essential for investors to fully understand how they work—and what outcomes are realistic. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Tesla, Inc. (TSLA) : Free Stock Analysis Report MicroStrategy Incorporated (MSTR) : Free Stock Analysis Report PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report Marathon Digital Holdings, Inc. (MARA) : Free Stock Analysis Report SPDR Portfolio S&P 500 ETF (SPLG): ETF Research Reports JPMorgan Equity Premium Income ETF (JEPI): ETF Research Reports Invesco NASDAQ 100 ETF (QQQM): ETF Research Reports Coinbase Global, Inc. (COIN) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
19-02-2025
- Business
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Self-Made Millionaire With Portfolio Earning $70,000/Month In Dividends Shares Top Stocks – 'Why I Hold 15,000 Shares Of This One Stock'
Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. Investing in high-yield portfolios has long been a strategy for building long-term wealth and generating passive income. The rewards can be colossal for those willing to cross the intricacies of the market, and one self-made millionaire has mastered this strategy. The investor has amassed a portfolio valued between $2 million and $5 million with average dividend yields of $69,838 monthly and $81,896 in dividends in January alone. At the heart of her strategy, there's a strong belief in dividend-paying stocks and ETFs, especially one stock she holds in high regard, in which she has 15,000 shares. Overall, the investor's portfolio has a mix of high-yield ETFs, blue-chip stocks, and some speculative plays, all chosen to offset risk and reward. Don't Miss: The secret weapon in billionaire investor portfolios that you almost certainly don't own yet. Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — The poster started small and built her portfolio over decades. As she puts it, 'I started small way, way, way back, so this is created over the course of my adult lifetime.' Let's dive deeper into her portfolio, examining her stocks, from high-yield ETFs to blue-chip giants. YieldMax XOM Option Income Strategy ETF An ETF that seeks to generate monthly income by writing call options on Exxon Mobil Corporation (NYSE:XOM) stock, YieldMax XOM Option Income Strategy ETF (NYSE:XOMO) pays investors a distribution rate of approximately 16.49%. YieldMax TSLA Option Income Strategy ETF Like XOMO, YieldMax TSLA Option Income Strategy ETF (NYSE:TSLY) also generates income through call options but on Tesla Inc. (NASDAQ:TSLA). TSLY pays investors 77.87% in dividend yields. Trending: CEO of Integris gathered a team of senior investment managers who have $34.22 billion in combined owned and managed assets in the West Coast — Defiance Nasdaq 100 Enhanced Options & 0DTE Income ETF Employing options strategies on the NASDAQ-100 Index, Defiance Nasdaq 100 Enhanced Options & 0DTE Income ETF (NYSE:QQQY) focuses on same-day options. QQQY generates a dividend yield of around 38.76% yearly. YieldMax GOOGL Option Income Strategy ETF Similar to XOMO and TSLY and paying around 21.36% in dividends, YieldMax GOOGL Option Income Strategy ETF (NYSE:GOOY) writes call options but on Alphabet Inc. (NASDAQ:GOOG). Roundhill S&P 500 0DTE Covered Call Strategy ETF Paying a dividend return of 20.26% to investors, Roundhill S&P 500 0DTE Covered Call Strategy ETF (NYSE:XDTE) uses covered calls on the S&P 500 index and specializes in same-day options. YieldMax MSTR Option Income Strategy ETF Writing call options on the MicroStrategy Incorporated (NASDAQ:MSTR) stock, YieldMax MSTR Option Income Strategy ETF (NYSE:MSTY) is among the highest-yielding ETFs on the market, with dividends at around 98.14% Municipal Income Opportunities Active Exchange-Traded Fund PIMCO Municipal Income Opportunities Active Exchange-Traded Fund (NYSE:MINO) is an actively managed ETF that provides current income exempt from federal income tax by buying municipal bonds. MINO pays investors 3.44% in annual dividends. PIMCO Dynamic Income Fund A closed-end fund that seeks current income and capital appreciation by investing in a varied portfolio of fixed-income tools, PIMCO Dynamic Income Fund (NYSE:PDI) is the holding the poster has 15,000 shares in. PDI offers a distribution rate of 10.12%. Eli Lilly and Company Eli Lilly and Company (NYSE:LLY) is a global pharmaceutical company famous for its innovative drug development and solid product pipelines. Investors are paid around 0.6% to 1.2% in annual dividends. Alphabet Inc. The parent company of Google, Alphabet Inc. (NASDAQ:GOOG, GOOGL)) specializes in internet-related services and products, such as search engines, online searching and cloud computing. GOOG does not currently pay dividends. Wondering if your investments can get you to a $5,000,000 nest egg? Speak to a financial advisor today. to decide which one is right for you. . With over $1 million in dividends paid out last quarter and a growing selection of properties across various markets, Arrived offers an attractive alternative for investors seeking to build a diversified real estate portfolio. In October 2024, Arrived sold The Centennial, achieving a total return of 34.7% (11.2% average annual returns) for investors. Arrived aims to continue delivering similar value across our portfolio through careful market selection, attentive property management, and thoughtful timing in sales. Looking for fractional real estate investment opportunities? The features the latest offerings. This article Self-Made Millionaire With Portfolio Earning $70,000/Month In Dividends Shares Top Stocks – 'Why I Hold 15,000 Shares Of This One Stock' originally appeared on Sign in to access your portfolio
Yahoo
13-02-2025
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'Done With 9-to-5 Grind': Dividend Investor Reaches $5,080/Month, Shares 10 Stocks Fueling His 2026 Retirement Plan
Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. Dividend stocks have been contributing significantly to market returns over the past several decades. Data shows that from 1998 to 2018, dividend stocks' compound annual return came in at 7.5%, compared with 6.6% for non-dividend stocks. Last year, someone asked dividend investors on Reddit to share their average monthly dividend income. Several income investors shared impressive portfolios and numbers, but one particular comment got our attention. An investor shared his portfolio screenshots that showed he was making about $60,900 a year, or $5,080 per month, in dividend income. His overall yield was 31%, which is extremely high because most of his portfolio consisted of risky covered call ETFs. The investor said after getting frustrated with his daily 9-to-5 job, he decided to take loans and invest into covered call dividend ETFs and plan a retirement path. Don't Miss: Warren Buffett once said, "If you don't find a way to make money while you sleep, you will work until you die." BlackRock is calling 2025 the year of alternative assets. "Back in July 2023, I decided I was done with the 9-to-5 grind and really wanted to retire. So, I took out around $104K in loans and invested it into YieldMax ETFs. The dividends are high enough to cover my loan payments, with some extra left over. I use that extra dividend to invest in more stable funds once the loan payments are taken care of." He said so far, his plan is working and he aims to retire by the end of next year. "For now, I'm focused on maximizing compounding to grow my monthly payments. My goal is to retire by the end of 2026, hopefully I'll be debt free and retired in 2027." Trending: Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — YieldMax TSLA Option Income Strategy ETF About 25% of the total portfolio of the investor earning $5,080 a month in dividends was allocated to YieldMax TSLA Option Income Strategy ETF (NYSE:TSLY). YieldMax TSLA Option Income Strategy ETF is a popular dividend ETF for income investors seeking high yields. With a distribution rate of 74%, TSLY generates income by selling call options on Tesla (NASDAQ:TSLA) shares. TSLY is down 30% over the past 12 months. YieldMax COIN Option Income Strategy ETF YieldMax COIN Option Income Strategy ETF (NYSE:CONY) makes money by selling call options on Coinbase Global (NASDAQ:COIN). CONY is a risky investment since its upside potential is capped due to the covered call strategy and its performance is linked to a single company operating in the volatile crypto industry. The fund has a distribution rate of 114% and pays monthly. CONY is down 40% over the past 12 months. CONY accounted for about 7.7% of the total portfolio. Global X Nasdaq 100 Covered Call ETF Global X Nasdaq 100 Covered Call ETF (NASDAQ:QYLD) was one of the top holdings of the investor who collected about $5,080 per month in dividend income. It is a notable ETF that earns money by selling covered call options on the Nasdaq-100 Index. The fund was started in 2013 and has since paid monthly income to investors. The fund yields about 12.5%. Some of the top holdings of the ETF are Apple (NASDAQ:AAPL), Nvidia (NASDAQ:NVDA), Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), and Broadcom (NASDAQ:AVGO). Over the past year, QYLD is up 3.9%. It had a 7.9% weightage in the portfolio, according to the portfolio screenshots shared by the investor. Trending: , which provides access to a pool of short-term loans backed by residential real estate with just a $100 minimum. Defiance Nasdaq 100 Enhanced Options ETF The Defiance Nasdaq 100 Enhanced Options & 0DTE ETF (NASDAQ:QQQY) provides investors exposure to the Nasdaq 100 Index and generates income by selling call options. It has a distribution rate of 39%. YieldMax NVDA Option Income Strategy ETF YieldMax NVDA Option Income Strategy ETF (NYSE:NVDY) makes money by selling call options on Nvidia (NASDAQ:NVDA). The fund has gained popularity over the past few months amid the rise of Nvidia following the AI boom. The fund has a distribution rate of about 53%. NVDY suits investors who believe in Nvidia's long-term potential but want to hedge against possible declines in the chipmaker's shares. KraneShares KWEB Covered Call Strategy ETF The KraneShares KWEB Covered Call Strategy ETF (NYSE:KLIP) invests in the KraneShares CSI China Internet ETF and generates income by selling call options on the underlying securities. It has a 26% distribution rate and pays monthly. Global X Russell 2000 Covered Call ETF Global X Russell 2000 Covered Call ETF (NYSE:RYLD) made up 5.6% of the total portfolio. The fund generates income by selling call options on the small-cap-heavy Russell 2000 Index. The ETF yields about 13.2%. Being a covered call ETF, RYLD is also not risk-free and often posts losses during down markets. The ETF is now in the limelight as analysts believe small-cap stocks will be among the top beneficiaries of an easing monetary Income Realty Income (NYSE:O) is one of the most popular monthly dividend stocks in the market. In December, the REIT raised its dividend by 0.2%. Main Street Capital Main Street Capital Corp (NYSE:MAIN) is a business development company that raises capital by selling notes and shares to the public, lends money to small – and mid-sized companies and earns interest income. Unlike many other BDCs, Main Street Capital also asks for equity stakes in the companies it lends to. It has a dividend yield of about 6.7%. JPMorgan Nasdaq Equity Premium Income ETF JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ:JEPQ) accounted for about 3.3% of the total portfolio. It's a high-yield covered call ETF that distributes monthly dividend income. The ETF invests in Nasdaq companies and generates extra income by selling call options. Wondering if your investments can get you to a $5,000,000 nest egg? Speak to a financial advisor today. to decide which one is right for you. . With over $1 million in dividends paid out last quarter and a growing selection of properties across various markets, Arrived offers an attractive alternative for investors seeking to build a diversified real estate portfolio. In October 2024, Arrived sold The Centennial, achieving a total return of 34.7% (11.2% average annual returns) for investors. Arrived aims to continue delivering similar value across our portfolio through careful market selection, attentive property management, and thoughtful timing in sales. Looking for fractional real estate investment opportunities? The features the latest offerings. This article 'Done With 9-to-5 Grind': Dividend Investor Reaches $5,080/Month, Shares 10 Stocks Fueling His 2026 Retirement Plan originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Sign in to access your portfolio
