Yield max

Discussion in 'ETFs' started by wxytrader, Sep 11, 2024.

  1. BKR88

    BKR88

    Yes, "total return" is price + dividends.
     
    #11     Sep 12, 2024
  2. BKR88

    BKR88

    #12     Sep 12, 2024
    wxytrader likes this.
  3. traderjo

    traderjo

    What about NAV erosion in many of them
     
    #13     Sep 12, 2024
  4. nitrene

    nitrene

    These ETFs do the best in a high volatility security that goes sideways. UBS has a call writing ETF on crude oil USOI that has done pretty well because USO just goes sideways.

    I bet JEPI or XDTE will do well unless SPY moves much higher or lower.
     
    #14     Sep 12, 2024
  5. These yields should be sustainable.

    If you had 25,000 and were to sell atm puts on MARA weeklies you get around .55--.85 usually, so lets say .75

    25,000/15.47 = 1616 shares.
    1616*.75=1212 per weekly x 4 = $4800 per month x 12 = 58k per year.
    58k/25k=232% yield....obviously its not going to work out perfectly with draw downs, but these funds have the funds to deal with that.

    Most of these etf's are putting out about 70%-120% yield so theoretically they are only returning about 1/3 to 1/2 of the yields they can generate.
     
    #15     Oct 4, 2024
  6. S2007S

    S2007S


    Doesn't the options markets apply the dividend factor into the equation...is it that easy to sell puts and collect the premium each month?
     
    #16     Oct 4, 2024
  7. Well I imagine the suits have factored that in considering I came up with this same strategy from my basement. :)

    "What is the strategy behind the YieldMax™ ETFs?
    Each YieldMax™ ETF employs an actively managed options-based strategy. The predominant driver of potential income for this strategy comes from the selling of short-term options."

    It is that easy doing MARA or other high IV stocks, but you might get stuck from time to time selling calls below cost, unless you wait it out. You have to calculate if realizing the loss is worth keeping the premium rolling in...my spreadsheet says it is.
     
    #17     Oct 4, 2024
    S2007S likes this.