Shares in the YieldMax TSLA Option Income Strategy ETF (TSLY -12.97%) declined by 14.2% at 11:30 am today. The decline correlated with the fall in Tesla (TSLA -13.91%) shares following the release of its second-quarter earnings report. Here’s the lowdown.
Why YieldMax Tesla Option Income Strategy ETF declined
As the name suggests, the ETF uses option strategies to deliver returns to investors based on the performance of Tesla’s stock. It gains long exposure to the stock by buying call options and selling put options – both positions reward bullishness. At the same time, the ETF’s managers also sell call options, which “generally have a strike price that is approximately 0%-15% above the then-current share price of the Underlying Security.” This is a bearish strategy that rewards the ETF as long as the price of the stock doesn’t rise significantly.
Tidal Trust II – YieldMax Tsla…
