The YieldBOOST ETFs, primarily offered by GraniteShares, are designed to generate weekly income through options-based strategies, focusing on selling put options on leveraged ETFs tied to specific underlying assets like major equities, indices, or Bitcoin. These ETFs aim to provide high distribution yields while offering indirect exposure to the underlying assets, but they come with significant risks, including potential NAV erosion and capped upside due to their options strategies. Below is a list of active YieldBOOST ETFs, their strategies, and key characteristics based on available information.List of YieldBOOST Weekly Paying ETFs and Strategies
- GraniteShares YieldBOOST TSLA ETF (TSYY) – Div Yield = 160%
- Underlying Asset: Leveraged ETFs linked to Tesla Inc. (TSLA).
- Strategy:
- Sells put options on leveraged TSLA ETFs to generate income through premiums.
- Buys out-of-the-money put options to mitigate extreme downward movements in TSLA stock.
- Aims for weekly distributions, with income derived from net premiums (e.g., selling an in-the-money put at $105 and buying an out-of-the-money put at $95 for a net premium of $5.00 in a hypothetical scenario).
- Does not invest directly in TSLA stock, limiting exposure to price appreciation but maintaining downside risk.
- Risks: NAV erosion due to consistent put selling, high volatility of TSLA, and potential for significant losses if the underlying ETF declines sharply.
- Expense Ratio: Not explicitly stated but typically high for complex options strategies (e.g., ~1% based on similar ETFs).
- GraniteShares YieldBOOST QQQ ETF (TQQY) – Div Yield = 49%
- Underlying Asset: ProShares UltraPro QQQ (TQQQ), a leveraged ETF tracking the Nasdaq-100.
- Strategy:
- Sells put options (often in-the-money or out-of-the-money) on TQQQ to collect premiums for income.
- May buy out-of-the-money puts for downside protection (e.g., sells a $105 strike put and buys a $95 strike put for a net premium).
- Targets weekly distributions, leveraging the high volatility of TQQQ to maximize premium income.
- Indirect exposure to Nasdaq-100, with capped upside due to options selling.
- Yield: High distribution yields, potentially in the range of 30–50% annually, depending on market conditions.
- Risks: Structural price decay due to daily put selling, high expense ratios (~1%), and amplified losses in bearish markets due to leverage in TQQQ.
- GraniteShares YieldBOOST SPY ETF (YSPY) – Yield = 49.6%
- Underlying Asset: Direxion Daily S&P 500 Bull 3X Shares (SPXL), a leveraged ETF tracking the S&P 500.
- Strategy:
- Sells put options on SPXL to generate weekly income through premiums.
- Purchases out-of-the-money puts to hedge against significant declines in SPXL.
- Weekly distributions aim to provide consistent income, with indirect exposure to S&P 500 performance.
- Options strategy limits participation in SPXL’s upside but exposes the fund to downside risks.
- Risks: NAV erosion, high volatility from leveraged ETF exposure, and potential for losses in declining markets.
- GraniteShares YieldBOOST Bitcoin ETF (XBTY) – Yield = 95.8%
- Underlying Asset: Leveraged ETFs linked to Bitcoin (e.g., 2x Long Bitcoin Daily ETF).
- Strategy:
- Sells put options on leveraged Bitcoin ETFs to generate income from premiums.
- Buys out-of-the-money puts to limit exposure to extreme Bitcoin price drops.
- Targets weekly distributions, capitalizing on Bitcoin’s volatility for high premium income.
- Provides indirect exposure to Bitcoin without direct investment in the cryptocurrency.
- Yield: High yields driven by Bitcoin’s volatility, though specific figures vary and are not guaranteed.
- Risks: Extreme volatility of Bitcoin, NAV erosion from put selling, and regulatory constraints on derivatives exposure.
- GraniteShares YieldBOOST NVIDIA ETF (NVYY) – Yield = 95.5%
- Underlying Asset: Leveraged ETFs linked to NVIDIA Corp. (NVDA).
- Strategy:
- Sells put options on leveraged NVIDIA ETFs to collect premiums for weekly income.
- Purchases out-of-the-money puts to hedge against significant declines in NVIDIA’s stock price.
- Weekly distributions aim to maximize income while offering indirect exposure to NVIDIA’s performance.
- Limits upside participation due to options strategy but retains full downside exposure.
- Risks: High volatility of NVIDIA stock, NAV erosion, and concentration risk in a single stock.
Additional Notes on YieldBOOST ETFs
- General Strategy: YieldBOOST ETFs employ a put-writing strategy on leveraged ETFs to generate high income. They sell in-the-money or out-of-the-money puts to collect premiums and may buy out-of-the-money puts for downside protection. This approach leverages the high volatility of underlying assets to maximize premiums but caps upside potential and exposes investors to significant downside risk. The funds do not invest directly in the underlying stocks or ETFs, relying instead on derivatives (options and swaps).
- Distribution Frequency: All YieldBOOST ETFs aim to pay weekly distributions, providing a consistent income stream for investors, which is particularly appealing for retirees or income-focused portfolios. However, distributions are not guaranteed and may include a return of capital, reducing NAV over time.
- Risks:
- NAV Erosion: Continuous selling of in-the-money puts can lead to steady price decay, potentially requiring reverse stock splits (e.g., QQQY, IWMY).
- Leverage Risk: Using leveraged ETFs as the underlying asset amplifies volatility and potential losses.
- Price Participation Risk: The funds have limited participation in the upside of the underlying asset due to the options strategy.
- High Fees: Expense ratios are typically high (~0.99–1%) due to the complexity of options management.
- Market and Liquidity Risks: Options markets can be illiquid, and the funds’ reliance on derivatives increases counterparty and market risks.
- Tax Considerations: Distributions may include ordinary dividends, capital gains, or return of capital, with tax treatment determined at year-end. This can reduce tax efficiency, making these ETFs more suitable for tax-sheltered accounts like IRAs.
