Investment company YieldMax applies to launch a yield ETF based on MicroStrategy stock

ChainCatcher news, according to Cointelegraph, a company named YieldMax has applied to launch the first income ETF product based on the Bitcoin holdings of Michael Saylor's company MicroStrategy. According to the application documents submitted to the U.S. Securities and Exchange Commission (SEC) yesterday, the options income strategy ETF based on MicroStrategy stock is planned to be released sometime in 2024.

If approved by the SEC, the ETF will trade under the ticker symbol "MSTY," which is only one letter different from MicroStrategy's existing ticker symbol "MSTR." YieldMax's pending ETF employs a "comprehensive covered call" strategy, which includes buying call options and selling put options to generate income. These earnings will be distributed as monthly payments to holders of the MSTY ETF.

It is noteworthy that the ETF will never hold any spot shares of MicroStrategy, but will only generate income through trading MSTR derivatives. To limit potential losses, the fund will cap the monthly upside risk of the call options at 15%. The monthly yield generated by the ETF does not directly depend on the growth of MicroStrategy stock, meaning that even if MicroStrategy stock suffers significant setbacks, investors will still receive the yield from the ETF.