sakowitzm
Recycles dryer sheets
I've recently become aware of the YieldMax ETF products and am seeking input on the mechanics of them, over time. I'll use YBIT for the purposes of this discussion (NOT looking for a discussion of Bitcoin's pros and cons, just picked that particular ETF for the discussion.) Two general topics: 1. Investors (speculators!) will never know exactly which options (strike price, expiration) the ETF contains at any given moment. Thus, as far as the dividend goes, investors are simply putting themselves in the hands of the advisors; the advisors need to be accurate (or at least in the ballpark) as to the short- and medium-term movement of Bitcoin. Do you agree? 2. Second, with regard to the daily movement of the ETF itself. When Bitcoin goes up, the ETF goes up. When Bitcoin goes down, the ETF goes down (maybe more, maybe less; not relevant.) So my question is this: depending on the inventory or covered calls in the portfolio, a drop in price might actually be GOOD for the ETF. It may bring some covered call to just out of the money, meaning YBIT will achieve maximum profitability on that option. Conversely, a rise in the price of Bitcoin could be BAD for the ETF. If Bitcoin rises well above the current strike price, the ETF will fail to achieve the desired tracking to Bitcoin and thus under-achieve on profitability. **** So... your thoughts? Are my statements generally true? Can you help me to better understand this thing? Thanks!
