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| blomblom | @someone44 |
Go To Page: Visit This Person's Page
| | __________________________________________________________________________________Post: interesting take on ulty which was posted on x, I am still not sure: $ULTY is continuing to deteriorate, even with the “new” strategy.
Here’s why 👇 🧵
It’s running a collar strategy on volatile securities with an “80%”+ yield for investors 😂.
For folks that aren’t familiar with collars: collecting call premiums + stock returns - put costs = very modest income (nowhere near the current yield).
The high cash distribution exceeds what the strategy earns.
In the event that volatility spikes, running a collar becomes very expensive (puts go up in price, while calls collect much less premium).
Capped upside on the strategy means that the fund can’t recover quickly when it gets into that spiral.
My guess is that eventually it will reverse split to keep the charade going and create the perception of large payouts again (eg a 10-1 reverse split means the fund can pay out $1/week instead of $0.10 😅).
Like most YieldMax products, they’re good for the management team, as they keep collecting their fees on the total assets.
If you pull up a chart of any of their single stock ETFs and compare it to just owning the underlying security (eg own $NVDA instead of $NVDY ), one will see how much upside they’re losing with these “feel good” strategies over time (longer time periods will have greater losses with the strategy). | 2025-08-17 | |
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