YieldMax Ultra Option Income Strategy ETF ($ULTY) is flashing a dividend yield north of 130% and trading at $6.40 per share. That payout figure—$8.41 over the past 12 months—is real. But the setup isn’t what it looks like on the surface. This isn’t a traditional income play. It’s a leveraged options strategy wrapped in an ETF, and the erosion under the hood is brutal.
ULTY’s weekly distributions are funded by aggressive call writing and synthetic exposure. The fund paid $0.1035 per share last week, with a distribution rate of 85.69% and a 30-day SEC yield of 0.00%. That means the income is almost entirely option premium, not net investment income. Return of capital accounts for over 80% of the payout. NAV erosion is baked in. The fund’s 52-week high was $14.40. It’s now down more than 55%.
The bullish case is short-term only. Traders use ULTY for weekly income harvesting, not long-term compounding. The fund is liquid, with 44.6 million shares traded on July 15. Net assets sit at $673 million. Expense ratio is 1.3%. If you’re timing volatility spikes and selling into yield chasers, there’s room to scalp. But holding through cycles will bleed capital.
Bearish flags are everywhere. The payout ratio is over 5,300%. Dividend growth is negative. The fund has cut distributions 20 times in the past 3 years. NAV decay is accelerating. The underlying strategy caps upside and exposes full downside. There’s no hedge. No floor. Just premium collection and erosion.
This is not a retirement vehicle. It’s not a dividend growth play. It’s a tactical instrument for short-term yield extraction. If you don’t understand the mechanics, you’ll get wrecked. The yield is real. So is the decay.
Disclaimer: Not financial advice.
Sources:
https://stockanalysis.com/etf/ulty/dividend/
https://marketchameleon.com/Overview/ULTY/Dividends/