YieldMax TSLA Option Income Strategy ETF (TSLY)
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TSLY: Selling Covered Calls Against Tesla Could Pay Off Now (Upgrade)
YieldMax TSLA Option Income Strategy ETF has been a controversial investment and remains so, with a distribution rate of 101%. TSLY has matched the S&P 500 on a total return basis over the past two years, despite increased volatility. The ETF's performance is closely tied to Tesla earnings, as TSLY maintains a long position in Tesla stock.
51% Distribution Rate From TSLY Stock: Is It Real or Just a Yield Trap?
If you like Tesla (NASDAQ:TSLA) stock, then you should absolutely love the YieldMax TSLA Option Income Strategy ETF (NYSEARCA:TSLY).
Why TSLY Should Be Avoided Here
TSLY's covered-call strategy on Tesla has not outperformed TSLA since inception, with annualized returns of just 5.81%. The ETF's high distribution rate (~50%) isn't the whole story, as payouts are offset by a declining share price, limiting real investor gains. Implied volatility on Tesla is unusually low, making call selling less attractive and suggesting TSLY's income strategy is now a crowded trade.
YieldMax TSLA Option Income Strategy ETF (TSLY) FAQ
What is the stock price today?
On which exchange is it traded?
What is its stock symbol?
Does it pay dividends? What is the current yield?
What is its market cap?
Has YieldMax TSLA Option Income Strategy ETF ever had a stock split?
YieldMax TSLA Option Income Strategy ETF Profile
| ARCA Exchange | US Country |
Overview
The described investment fund focuses on implementing its investment strategy specifically with Tesla, Inc. (TSLA), irrespective of prevailing market, economic, or other adverse conditions. It firmly commits to its investment approach without adopting temporary defensive stances even in challenging periods. This stance indicates a potentially high-risk tolerance and a focused, unwavering investment philosophy centered around TSLA. The fund's operation is characterized by its non-diversified nature, putting a significant emphasis on its singular strategy without spreading investments across different assets or sectors. This approach can lead to higher volatility and risk, highlighting the fund’s confidence in TSLA's long-term prospects and its ability to leverage specific market conditions or insights regarding TSLA’s performance.
Products and Services
The fund employs a distinct investment product to achieve its objectives:
- "Synthetic Covered Call" Strategy using Options:
This product is essentially an investment approach that seeks to mimic the payoff of a covered call strategy without actually owning the underlying stock. Instead of purchasing TSLA shares and selling call options, the fund employs both standardized exchange-traded options and FLEX options to construct a position that simulates the income and payoff structure of a covered call. This method allows the fund to partake in TSLA's upside potential while potentially generating income through the sale of call options, all without direct stock ownership. The use of FLEX options also suggests a tailored approach to option contracts, offering more flexibility in terms of strike price, expiration dates, and other terms compared to standardized options. This strategy indicates a sophisticated, derivatives-based approach to investment, seeking to exploit specific market mechanisms and opportunities related to TSLA’s performance.
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