Summary YieldMax MSTR Option Income Strategy ETF offers an extremely high yield but carries significant risk and aggressive volatility due to its options-based strategy. MSTY's performance is closely tied to MicroStrategy shares, with a 1% drop in MSTR causing a 1.41% decline in MSTY, amplifying downside risk. Distributions are high but declining, driven by option premium income and capital return, which erodes the fund's net asset value over time. I rate MSTY as a 'Hold' for small allocations only, given its high risk, volatility, and limited growth potential despite attractive cash flow. Investment thesis According to my previous articles, many may think that I belong to the camp of crypto enthusiasts. But I wouldn't call myself that. Although I have been familiar with the cryptocurrency market for a long time (since 2016), I look at many of its projects and digital assets with a great deal of skepticism. When I was first introduced to the features of the YieldMax MSTR Option Income Strategy ETF ( MSTY ), however, I couldn't believe that more than $2.6 billion in AUM could be invested in such a risky and aggressive investment strategy focused on generating high monthly income. Because this fund focuses on using an options strategy when working with Strategy Inc ( MSTR ) securities, the risk and volatility of this asset increase significantly. And that is probably the main reason why MSTY shows negative monthly dynamics. Despite this, if you are willing to risk part of your capital in order to obtain a truly enormous yield (+230.43% per annum), then this asset is for you. A lot of analysts recommend selling it, and I agree with them because MSTY's momentum is still negative, maintaining a steady downward trend. Despite this, I want to find a few reasons to be optimistic about this asset. My recommendation to "Hold" is largely based on using a minimal amount of personal capital to purchase this asset with the aim of generating high passive income. Those risks associated with investing in MSTY do not allow this asset to be allocated a large portion of the investment portfolio (no more than 3%). Overview of the YieldMax MSTR Option Income Strategy ETF and its features YieldMax MSTR Option Income Strategy ETF is an exchange-traded fund focused on working with option contracts to generate monthly income for investors. The mechanism of the MSTY investment strategy is the active management of client funds, utilizing the sale of covered options or option spreads on Strategy Inc ((MSTR)) shares. The scheme is simple and involves the regular sale of call options on MSTR, utilizing the premium received to distribute monthly dividends to the investment fund's investors. Based on the latest info on the fund's website, the MSTY distribution is 98.04% capital gains and 1.96% income. The Distribution Rate is the annual rate an investor would receive if the most recently declared distribution, which includes option income, remained the same going forward. The Distribution Rate is calculated by annualizing the Fund’s most recent distribution and dividing the resulting amount by the Fund’s most recent NAV. Analyzing the payments themselves, it is worth noting that they are decreasing. This is caused by the results obtained in the form of premiums from the sale of options. There are a few reasons for this. Firstly, there is a decrease in the market volatility of the underlying asset Strategy Inc ((MSTR)), because the premium from the sale of call options depends on volatility. Higher volatility means more expensive options and higher premiums. Secondly, there has been a change in the frequency of payments. In fall 2025, monthly payments were switched to weekly payments due to their fragmentation. The third reason is that payments to investors imply a return of capital, due to which the net asset value of the exchange-traded fund decreases. Distributions Importantly, MSTY's investment strategy focuses on generating income from premiums when trading options, but not from direct ownership of MSTR shares. As such, it does not maximize financial gains from situations where the value of MSTR temporarily recovers (as we are seeing in 2025). In effect, MSTY creates an artificial barrier to profiting from the potential upside of MSTR through the sale of options, thereby ensuring a stable cash flow. Although its consistency may be at risk, as payouts may vary depending on the market volatility of MSTR itself. The exchange-traded fund does not directly own the asset Strategy Inc ((MSTR)), but rather uses derivative financial instruments for this purpose. Nevertheless, MSTY correlates with the return on MicroStrategy's stock itself, but not the price dynamics of an asset such as Bitcoin. Technical analysis of Bitcoin, MSTR, and their impact on MSTY Since the YieldMax MSTR Option Income Strategy ETF is an exchange-traded fund linked to MSTR stock options (which is a Bitcoin treasury holder), accordingly, its investment attractiveness should be influenced by market trends in the cryptocurrency market. In the technical analysis of BTC-USD, MSTR, and MSTY, we will use a weekly time frame (1W). First, it is suggested to look at the Bitcoin chart, where it's important to determine the global trend of BTC using classic technical analysis tools. Bitcoin Technical Analysis on the 1W Timeframe According to the weekly chart, we can see that a global upward trend channel has formed. At the same time, the bullish trend did not begin on August 5, 2024 (minimum level—$49,577), but from November 2022. However, the trend channel that is relevant to me is the one that has formed over the past year. Bitcoin's key support level is the June 2025 low of $98,240. The importance of this horizontal line is due to the fact that this is where the lower boundary of the upward trend channel is located. In case the price works with this support level, a liquidity raid is possible, after which the asset will resume growth in the interval of 2-8 weeks of consolidation. Let's now look at the dynamics of MSTR's share price using the same technical analysis tools and the same 1W time frame. While Bitcoin continues its global upward trend, MSTR has formed reversal patterns. In addition to the fact that the price has already moved far from its historical high ($543), in addition, the lower border of the uptrend channel was broken in the region of $330. Moreover, a key resistance zone ($404—$457) exists, due to which the asset's growth is limited. Because of these factors, a downward trend channel has already formed, its upper boundary is now around $415. Moreover, the target of the current decline in MSTR has almost been reached (support level—$231.5). In this zone, there is a whole pool of liquidity formed from equal lows, which raises the likelihood of a raid for a price rebound. However, if the price consolidates below, the next target for decline will be the lower border of the trend channel—the $140 price range. MSTR Technical Analysis on the 1W Timeframe The cause of this discrepancy between the price of Bitcoin and MSTR lies in the risks faced by MicroStrategy. I'll discuss this in more detail in the next section of the article. Let us now move on to analyzing the MSTY chart, where one thing is clear: the asset is in an aggressive downtrend, reminiscent of a "falling knife" situation. I could not determine any price range for the trend channel. Basically, we have a continuous price decline that is aimed at an empty chart (due to which there are no support levels or zones). MSTY Technical Analysis on the 1W Timeframe Comparing the MSTY chart with Bitcoin, we can see that there is no direct correlation between them. The MSTR chart, however, shows a similar situation. The only adjustment would be how aggressively each of these assets is moving towards a price decline. MSTR and MSTY both set their historical highs in November 2024, after which a sharp reversal of the uptrend to a downtrend began. If from the high level, the negative dynamics of MSTR turned out to be more modest (according to data for November 7, 2025)—a decline of -56.3%, the decline in MSTY was more aggressive (-79.6%). So, we can say that a 1% drop in MSTR shares causes a 1.41% drop in MSTY value. Risks of the investment thesis Because the results of the technical analysis of Bitcoin, MSTR, and their impact on MSTY revealed a direct correlation between MSTY and MSTR, where the decrease of the second asset by 1% equals the decrease of the first by 1.41%, then accordingly, to assess the risks of the investment idea, you should consider the factors that affect the change in the value of MicroStrategy. A key concept of this organization is to purchase Bitcoin through the issuance of its securities. Earlier, this was done through additional share issues, however, convertible bonds are increasingly being used today. As a major player in this industry, MicroStrategy now owns more than 600,000 Bitcoin. That's almost 3% of the total supply on the market. The latest data shows that its debt is $8.21 billion . For instance, at the start of 2024, this debt was $2.24 billion, which is 72.7% less. Total debt on balance sheet Also worth considering as a risk is that MSTY, like similar exchange-traded funds linked to cryptocurrency assets, has a high standard deviation . As of today, the figure stands at 53.08%, significantly higher than the median for all ETFs, which is 12.43%. Furthermore, the annual volatility of this asset is 70.42%. For instance, the iShares Bitcoin Trust ETF ( IBIT ), which I have recently recommended as a "Buy," has a volatility of 44.67% . This exchange-traded fund invests in Bitcoin. Conclusion In summary, the results of my fundamental analysis of IBIT allow me to evaluate this ETF as an asset that is accompanied by high investment risk, high market volatility, and a maximum yield received by investors every month (and now every week). My recommendation to "Hold" implies a minor investment in MSTY, since the degree of risk associated with it is comparable to the speculative investments that characterize only the altcoin (cryptocurrency) market. It's important to understand that it's the high payouts to investors that lead to significant cycles of decline in the price of MSTY, because a significant portion of the premium paid by the exchange-traded fund is distributed in such a way that the net asset value of the ETF itself decreases. The bottom line is that MSTY is a risky financial instrument; although it has the highest monthly cash flow, it has limited potential growth and is characterized by higher market volatility than MSTR shares and Bitcoin itself. If you're willing to take a risk in order to get high regular payments, then my recommendation is to "Hold," meaning you should buy a small lot size. If you don't think these risks are worth it, then "Sell" would be a reasonable decision for your investment strategy.
