YieldMax COIN Option Income Strategy ETF (CONY)
ARCA ARCA Primary 
CONY: Re-Evaluate Your Risk Tolerance
The YieldMax COIN Option Income ETF earned a hold rating from me in the past, given its consistent underperformance of its reference asset, and its older strategy. Since changing its options strategy, the fund has not been able to produce much more income, and the last two distributions are the lowest ever. Investors are cautioned to consider the reasons they own the fund, and if there are other strategies that could outperform CONY while providing the same exposure to income and risk.
CONY: A Smoother Ride On COIN, Not A True Income Strategy
YieldMax's Income ETFs have a capped upside gain, posing a risk of underperformance in volatile markets, but some plans are better placed. COIN's volatility is comparable to MSTR, raising red flags for CONY, but recent data shows a slightly lower risk profile. CONY's performance captures more upside than expected, but shows lesser downside protection. Reflects as a poorer market-agnostic income plan.
CONY: Covered Call ETFs Don't Avoid Big Losses, Only Small Ones (Downgrade)
YieldMax COIN Option Income Strategy ETF and Coinbase stock have both experienced significant declines, reflecting the inherent cyclicality of the crypto market. Coinbase's revenue is heavily influenced by crypto trading volume, with Bitcoin and Ethereum accounting for a substantial portion of its transaction revenue. Despite efforts to diversify revenue through Subscription & Services, Coinbase remains highly cyclical, warranting a lower valuation multiple compared to less volatile sectors.
CONY: Yield Is High But Risk Is Higher
YieldMax COIN Option Income Strategy ETF offers high dividends but is risky with an annual expected return of -16% and a potential 70% YoY value loss. CONY uses a synthetic covered call strategy, generating income through call options on COIN, but doesn't directly invest in Coinbase shares. CONY's performance is significantly lower than COIN's, with a 0.39 correlation during bull runs, making it less suitable for capital protection.
CONY: Recent Performance Highlights Flaws In The Fund's Construction
Fund managers aim for approximately 80% price upside, maintaining a net short position of around 20% at any time. This strategy balances potential gains with risk management, providing a hedge against market downturns. The approach is designed to optimize returns while minimizing exposure to adverse market conditions.
CONY: High Yield, But Proceed With Caution
The YieldMax COIN Option Income Strategy ETF offers a 91.17% distribution rate, driven by Coinbase's volatility, but this doesn't guarantee profitability. Despite the high yield, I think Coinbase is a better choice at this point in time because of relatively low implied volatility. Current market conditions and seasonal trends suggest Coinbase may perform well in April, making direct ownership more favorable than selling covered calls.
CONY: Riskier Income Play On A Decent Stock
YieldMax COIN Option Income Strategy ETF uses a synthetic covered call strategy to produce its income yield of around 150%. Comparing total returns since CONY's inception highlights the advantage of simply owning COIN. CONY is therefore suited for people who really want its monthly dividend, but there are risks that come with this.
CONY: Cautious Of A Shift In The Crypto Cycle (Rating Downgrade)
YieldMax COIN Option Income Strategy ETF offers a massive 111% dividend yield, but suffers from significant capital deterioration and limited upside potential. CONY's synthetic option strategy generates high income but exposes investors to full downside risk, especially if Bitcoin's price crashes. Despite Coinbase's strong financial performance, CONY underperforms COIN shares; holding COIN directly is preferable for long-term bullish investors.
CONY: 150% Yield Not Enough To Buy This Coinbase ETF
The 150% yield on YieldMax COIN Option Income Strategy ETF was real, but unlikely to be repeated due to COIN's volatility. Despite the high past yield, CONY's future yield is expected to be much lower, but still double-digits, given how volatile the underlying COIN stock should continue to be. The ETF's yield is derived from complex option strategies, not COIN's dividends, making its performance highly volatile and unpredictable.
CONY: Holdings Breakdown Reveals Key Factors For Underperformance Through 2025
Breakdown Analysis reveals that CONY Fund Holdings is evenly distributed between bear, neutral, and bull options strategies, which is not ideal for investors with strong biases. In terms of dollars invested, CONY's fund is heavily concentrated on the bull puts (Fig 2: 72% compared to 21% long naked calls and 7% credit call spreads). In terms of the number of contracts, CONY's options strategies are evenly distributed among bull puts (40%), bear call spread (30%), and long naked calls (30%).
CONY: The Superior Alternative To Coinbase Shares
Bitcoin's post-election surge lifted related stocks, including Coinbase (COIN); YieldMax COIN Option Income Strategy ETF (CONY) offers a unique way to gain exposure to Coinbase. CONY generates monthly income by selling options on Coinbase stock, capping upside but cushioning downside, making it a strategic alternative to owning COIN shares. Despite Coinbase's volatility and high expense ratio, CONY's average annualized distribution of ~$20 per share highlights its income potential, albeit with associated risks.
One Year Later, I Was Wrong About CONY And Its Yield (Rating Upgrade)
A year ago, I predicted YieldMax COIN Option Income Strategy ETF would underperform, and while its price dropped, it achieved an 86% total return. Despite a price decline from $25 to $15 per share, CONY's total return performance makes it competitive with COIN. My recent positive ratings on YieldMax funds, including YMAX and YMAG, reflect my updated perspective on their potential.
