70%+ Yield?! YieldMax Option Income ETFs OARK & TSLY | Synthetic Covered Calls on ARKK & TESLA
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- เผยแพร่เมื่อ 26 ก.ค. 2024
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00:00 Intro
01:15 TSLY ETF Review
05:40 ETF Strategy (Synthetic Covered Calls)
09:15 9 More "Single Stock" ETFs Coming...
10:03 OARK ETF + 4 Other ETFs Coming...
12:16 Q&A w/ZEGA - Who Owns these ETFs?
14:40 ETF Concept & Strategy
17:15 YieldMax Option Strategy Explained
19:18 "Synthetic" Covered Call Strategy?
23:42 Dividend (Yield) Sustainability
26:24 How to use these ETFs
30:08 ZEGA Firm
31:22 When will the other ETFs be out?
Disclaimer:
DISCLAIMER: The videos and opinions on this channel are for informational and educational purposes only and do not constitute investment advice. Adriano Starinieri is not registered to provide investment advice and as such does not provide recommendations - those looking for investment advice should seek out a registered professional. Adriano is not responsible for investment actions taken by viewers.
#passiveincome #investing #dividendincome #financialfreedom #livingoffdividends
The interviews with the fund managers/call writers have been enthralling. Learning the mechanics of these ETFs has been a boom for me! Thanks Adriano.
glad to hear this!
I recently bought a few ETFs. It's also a bad idea to save for a market decline. There are various viewpoints on recessions and depressions, we can't always count on seeing big returns, and taking chances is better than doing nothing. The bottom line is that you will get amazing results by diversifying your portfolio and making wise decisions. My portfolio generated a $608,500 profit in 2022.
The market's uncertainty is one of the reasons I have my daily investment decisions guided by an investment advisor, as their skill set is built around going long and also shorting the market to maximize returns, both employing profit-oriented strategy and laying off risk as a hedge against inevitable downtrends, and when combined with exclusive analysis, it's nearly impossible not to outperform. Since the 2020 pandemic, I've made more than $1.5M after subsequent investments thus far.
My advisor is ‘’Eric Thomas Witt’’ he’s highly qualified and experienced in the financial market. He has extensive knowledge of portfolio diversity and is considered an expert in the field. I recommend researching his credentials urther. He has many years of experience and is a valuable resource for anyone looking to navigate the financial market
It's crazy to me that with just 100K you could potentially make a modest full time living on the dividends from TSLY alone. Man, I wish I trusted it! It just feels like disaster waiting to happen. But what the hell, I'm throwing a little bit into it. Great and informative video.
I feel the same man
Yeah sounds too good to be true it probably is.
I don’t think it is going to go broke, but the yields could be muted. It’s not gambling. The call seller acts like the “house” in a Vegas casino. The option BUYER is the gambler. This is actually a relatively safe strategy. IMHO.
Why worry. Set the stop loss where you feel comfy at.
@@TripleChevys actually when it recently dropped below 14 I bought a shitload of it.
I just bought a whole bunch of TSLY before stumbling upon this video. Watching this only solidified my approach to this. I plan to buy more once I’ve made back my original investment in the collected dividends. I will be using yield max as a big part of my investment strategy to fund my other investments
look into YMAX and check out my Q&A videos with the options manager
This video is timely for me as I have been looking at OARK and considering adding it. The dividend is high and does concern me, so before I add it, videos like this are helpful... Thanks Adrian
Glad it was helpful!
@@PassiveIncomeInvesting could you invest in one of them 70% ETF< then sell it 1 yr later? like if i put $100k after 1yr it pays me $70k? dividend?
and i sell my stock and invest in another stock if i want?
@Blake
What is your definition of a dividend?
@Blake It's still listed as a dividend everywhere, including Fidelity.
@@kaleeysmith8801 you could.. but there's no guarantee that your inital 100 K will be intact.. if Tesla goes down, your initial investment may go down.
Did you end up buying?
Love this! Writing calls & cash secures puts on TSLA requires $18,000 per contract @ current prices. Similar idea without the huge amount of capital required. Great interview! Thanks & much appreciated
Hi, putting together a purchase call and a sold put is like having bought the stock for less cash....so as I see it, it is some sort of leverage with more risk. Selling calls out-of-the-money is brigning income but 70% yield seems a hard task to maintain. I would consider that product as some kind of loto ticket and use it short term for getting cash quickly.
The biggest risk is Zega’s ability to write weekly covered calls. If they have to close out their weekly short calls at a loss, then that’s less premium for the investors. What am I missing? I appreciate the overview but asking Jay more about the risks of the fund would be more beneficial as a viewer
risk is subjective aka it means different things for different people. the risks are the same as with any other covered call strategy: giving up too much upside in a strong bull market , but that is where the rich premiums come in to cushion that. this is true for all covered call strategies.
Synthetic covered call strategies lose a LOT of money if the underlying continues going down for an extended period of time. But on the other hand, if one is lucky to buy it at the beginning of a bull run, it really pays dividends (pun intended) to own these funds
Hi mark , it’s quite the opposite . The big yield cushions the downside . So if you count the Income , it looses much less than the underlying (like Tesla) . The issue is the upside during a bull run . Because of the call writing , it will not increase as much as the underlying .
@@PassiveIncomeInvesting Thanks for the reply! I was very focused about the underlying calls they’d have to buy. Yes gotta count the income for sure. I’ll try to follow the actual numbers of this fund closer to see how it pans out. Thank you!
Great video Adriano. This is exactly the kind of content I would like to see more of. Interviewing the people that manage the funds to get some ideas on the mechanics of how they work. Makes me feel more comfortable in the decisions i make investing.
thanks Tony, i do not get much appreciation for Q&A videos, as I spend a lot of time coordinating these. make sure to check out my other ones (i have a specific playlist on interview videos)
Still don't understand it but this far I'm enjoying it. Hope it continues. Think these stocks will continue to be volatile.
This is paying out great dividends but they are adding to the float aggressively. Since inception it is down 34% as the volume is picking up. In January the volume was less than 50K now it is between 200k and 600k.
I put a lump sum in two of the Yieldmax funds thinking of it like a tool that makes money but might wear out one day. As long as I make more than the initial lump Im ok with that. The income the "TOOL" generates every month feeds my long-term growth and income investments.
good way of looking at it!
Holy cow what a move up this morning with TSLY, but perhaps anticipated as they publish exact call and put dates? Thanks Adrian.
of course, TSLY follows Tesla stock price
These ETFs I view as a hedge during a bear market. The distributions will be high when the stock moves sideways or lower, while other parts of your portfolio you can build to pay better distributions when market in general goes higher.
yes that goes for all CC strategies
The most popular product of 'YIELDMAX' will be "APLY." TSLY, OALK seems hard to get big results because of its high volatility. I will invest mainly in APLY. Your video was very helpful Thank you.
Ya you got this backward. The more volatile the underlying stock, the more it earns to distribute.
Do you recommend TSLY?
Fantastic due diligence, and great interview! Subscribed 👍
Interesting picks Adrian! This video definitely helped me to understand the synthetic covered call strategy. Since most of the fund's money is in the US Treasury, the fund is safe. Going to start a position. 70% yield can't be ignored. 😄
Hey buddy!, gotta be careful calling it "safe" just because most of it is in treasuries. that is simply the collateral for the fund. they do 100% portfolio coverage when it comes to writing calls, so it really is a premium harnessing strategy
@PassiveIncomeInvesting , got it, got it. 😅 Safe is just a relative term. Nothing is guaranteed. Synthetic covered call is just more capital efficiency since the fund does not hold the actual shares. A small position should be fine. Like I said 70% yield can't be ignored.
Already dabbling in both - we'll see how it goes - had picked 5 Ark funds for a small investment - but heck - wasn't paying anything - so I consolidated that into OARk - hope to see healthy divs
yeah its the only way i would own anything now... no income = i dont want it
@@PassiveIncomeInvesting that’s why crypto doesn’t appeal to me. I do trade crypto on leverage but just scalping. But to hold onto it W/O dividends? No thanks lol.
Great video and wish I knew this sooner. Just recently got into some funds.
Is it safe to say while the treasury bonds interest rates are high, dividends would be higher than normal? Should bonds go doen (say to 2-3%) dividends won't be as much?
Also share allocation. I have noticed that the company is issuing more shares. Assuming more shares results in a lower distribution as it now has to allocate the same capital back to more shares.
Still new to options and this but getting a lot more understanding
Thanks for this video!
bond yields and interest rates having nothing to do with the distributions on covered call ETFs. Volatility dictates how rich the premiums are.
Is there a U.S. available Covered Call ETF for BRK like there is in Canada?
Today is March 29, I haven't seen any more funds appear yet. Are the new yieldmax funds close to launching?
thanks for responding Im simply trying to dig my teeth in to and extreme risks for ETfs like SVOL or TSLY Im headed in to both I appreciate your work and videos you said you have training courses ?
Hello Adrian, your links dont work anymore. I Just tried to download the latest version of your Main Portfolio but it won*t open. The same seems to be true for your other links.
Try chrome , Firefox doesn’t work
Thanks Adrian for the Video on these very interesting funds. However, I wish there was more time spent on explaining the strategy in more detail so could better understand the risks. I decided to go to the site and get more info. Even after reading about the strategy in the prospectus I am still not sure I properly understand it. From what I can tell, the biggest risk is if the underlying stock (ie Tesla) drops a lot, the sold put options will be exercised and the fund manager will have to buy shares from the put option owners at the low price with big losses. So from that perspective the risk of this fund is similar to owning the shares of Tesla. If they go down too much you lose a lot.
its very similar risks to owning Tesla stock. the risks are the same as with any covered call strategy
I like this it makes sense and is novel still trying to define the downside or blow up case scenario ??>
Hope they can launch similar funds on the indices!!!
who knows!
Hi Adrian, quick question, just started investing in tsly and realized their dividend is technically distributions, does that mean it's subject to 39% withholding taxes in a non registered or rrsp account?
anything listed in the U.S. is subject to the 15% tax
@PassiveIncomeInvesting thanks. It was nice seeing you in Montreal
not finding TSLY on Wealthsimple.... where else can we find it in Canada? thanks
Questrade
Great video Adrian. Glad to learn of more YieldMAX ETFs coming our way this year. And interesting strategy with this ones. Jose
I had something strange come up on my brokerage for June. USOI came up as tax exempt. I noticed the tax exempt amount and looked it up and there it was. Strange that it would start doing that. I don't have any munis anymore so it kind of stood out.
can we buy these in Canada? where.?
Adrain, can you explain what affects the stock price? Is it the underlying assets held or is it more based on the volatility of the TSLA stick price?
Underlying
Very informative video on Yieldmax ETFs.
I have both. Adding more
Another great video. Thanks for sharing. Unfortunately Wealthsimple doesn't offer them. This list is becoming longer all the time.
How would we know if the distributions are from option income or from the manager selling TSLY? Are these issues regulated?
? they are not selling TSLy i dont get what you would think that. its all option income + the interest from holding the t bills
The high yield makes total sense given their options strategy. I’ll be buying more TSLY and OARK. I’ll grab some APPL when it comes put.
Thanks for the video❤
Very interesting info! Definitely some ETF's to watch!
It's likely the recent huge surge of TSLA call option buying was driven by the ETF manager. That can drive the stock up as well?
They mostly sell calls on TSLA not buying calls so I doubt it. That's how he generates the premiums for the high div yield. The volume is also in the tens of billions of dollars so I doubt he uses enough capital to move the market.
Thought I had a cat at my door lol.
lol
Thanks for the video,I just get same Tsly today
Can You buy TSLY on Wealth simple
I know that it's easier to refer to a fund's yield as a "dividend", but since these investments don't actually collect dividends, is it right to assume they payout a capital gain?
yes 100% they are distributions, not dividends technically. its easy to say one for the other :)
It's not a capital gain. A capital gain is when you sell the investment for a price higher than what you bought it for. If you hold and don't sell, and it pays you cash, it's either a dividend or a distribution.
@@Martmi29
Believe it or not there is also something called capital gain distributions which you can get without selling a stock kind of like a dividend. I’ve got them before on the regular ark etf
Can these be bought via Fidelity or only with YieldMax
?? these are ETFs you can buy them with any Broker
Hi Adrian. Thanks for the great catch opportunities and for sharing with us. Please keep up the good work. Thanks
I would imagine there would be some taxes involved in purchasing these you’ll probably want to do it in your RRSP?
yes 15% tax on the income since they are U.S. listed . RRSP is immune to that
I don't consider myself knowledgeable in these types of investments but from what I can understand...we the investors, buy these products, that money goes into a pool, then the Money Experts take it and buy shares under their name. They pocket the dividend yields, if they have any (in case they do have shares that provide dividends) and they in turn invest in things at such a grand scale (due to so many customers buying their Investment Vehicle, through their options and puts and calls or whatever any of that is... and they are being their happy self "traders" while we are beinig our helpself passive investors. It's cut throat anyways, because above any fees we pay to manage our funds, they also can skim a few extra bucks off the top via promising us a certain return. So, say, they will allow us 12% return after a set amount of time, say 3 years...they are raking in the other 3 to 8% from any overages. So, am I right? I don't know. I really want to know, what's in it for them. Besides, our fee.
TSLY is brilliant management with a solid income strategy. I've been loving it for 2 months.
Hey bro, can you kick down any education/advice on how you manage it??! Would love to learn
Great video ! It helps me understand better how the big distribution is made possible.
Glad it was helpful!
Good to know, but i won't be buying because of 15% withholding tax in TFSA like CLM. This is good in RRSP say maximum 5% exposure only?
RRSP!
do they pay monthly ?
So far.
yes , the distribution schedule is on their website for all of 2023
Great video. What happens when tesla drop 30% or 40% ? Do they have any downside protection as well?
no, it will capture the full downside of TESLA if it does, but the premiums provide the safety cushion, just like all CC strategies
When will GDXY be available?
Thanks Adrian, very interesting... won't be a large part of my portfolio, but will contribute a bit! Nice interview!
#1 Question : Hey Adrian, do you see yourself adding these funds or any of the other Yieldmax funds to your own portfolio?
As ever, I think I speak for all your fans when I say we are very grateful and impressed by your transparency about what you yourself choose to own.
Personally, I'd need to see the performance over the course of 6 months to a year before I felt comfortable investing in the funds.
Combining Calls and Puts into a single strategy is something I've thought about, but seeing how it plays out in execution is the deciding factor on whether or not it's worth pursuing for myself.
as usual, you will see what i own and my recent buys on my monthly portfolio unveil video :)
@@PassiveIncomeInvesting Thanks for the reply Adrian. Looking forward to your most popular video of the month with baited breath. Get your Cat a Scratching Post. She seems to have a lot of unspent energy. My cat needed to run constantly when she was younger to be quiet in the house. She was a lot of fun though. 🐈
thank you adriano. May I ask if tsly has a roc?
cannot know until the 2023 breakdown is declared
@@PassiveIncomeInvesting Thank you. I am a Korean investor who is investing in Korea. There were not many contents that could be found on Korean sites and in Korean, but you interviewed the person in charge and got a lot of information. Thanks a lot. It was very helpful. I'll subscribe and watch it I wish you all the best.
Is it worth holding it in Non registered as the Yield is decent for TSLY ? Thanks for this video Adriano :)
What financial platforms are these etf's available to purchase on?
Charles Schwab
Sofi
Robinhood
Etrade
Vangaurd
I use etrade. I would guess any brokerage platform has them though.
Robinhood has them.
Schwab has them.
Is that your cat meowing in approval?? My 2 Malteses heard it are now barking in approval as well...great video as always...
I have watched many videos of you me and my husband are beginners and learning but we like the path that you’re on I understand it was a process to get there and the last video I watched it was about you guys and your process to move to Panama you also mentioned that you pay 1% to somebody to helping you with buying and selling would you be able to recommend this person to us is it financial consultant or a firm appreciate any feedback and help with this as we recently sold our home and we have maxed out on our TF essay and purchased RSP‘s but currently want to know exactly where to put our cash flow where it is safe and pays us a direct dividend every month
Hey Adriano, another insightful video....would it be possible for you to do a video that you crunch a few hypothetical numbers comparing one of these seemingly too good to be true ETFs with your tried and true HYLD? Perhaps base it on a 10k investment? I know we have to factor in higher fees and the 15% that is taken from it being a U.S. fund. It sure would be an interesting view with all info laid out side by side. Also, a pro & con list of investing in either fund would be of great interest. With all that said I am really considering buying shares in several of these types of ETFs. Thanks
It isn't as straightforward comparing, for example, HYLD vs these U.S. YieldMax ETFs, with the higher fees, value of the Cdn dollar to U.S. dollar, and the 15% withholding tax...with that said, the dividends are still much higher and very tempting to buy. I am thinking to buy shares in several of these YieldMax ETFs, to at least diversify and try to minimize any risk.
The kitty cat will not be ignored 😂
Excellent video...thanks for the information.
Looking forward to the nvda one. I trade options on this all the time
what strategy? selling calls?
@@PassiveIncomeInvesting no buy 2 month out calls ATM. But def has the volatility to be a good one like the Tesla fund.
@@Bella0480 I think Synthetic CCs are written a year out, if I’m not mistaken, not just a couple of week until expiration.
What type of distributions would this be, if its mainly options that generate the income?
good questions. in the U.S. i believe option income is ordinary income but do not quote me on that, i am not an expert on the U.S. tax system, its possible its short term capital gains also
The cat wanted some attention during the interview.
Does this investment use derivatives?
Excellent. They are not yet proven but very promising. Maybe jump in after a year or so of good proof. Thanks! Love yr channel!
The guy said they would launch 2 more ETFs in March but they didn't.
if it was up to him they would all be launched. blame the regulators not him
@@PassiveIncomeInvesting Looks like they recently launched Apple version (APLY). I'll check it out.
Great video, very useful funds!
I wonder if Wealthsimple will ever add these
switch to questrade and stop wondering forever
How are these taxed in Canada?
Put ‘em in your rrsp so you don’t have to find out
Everything in the video makes sense, but my gut just screams "too good to be true." I'll hold off for a while and see what happens.
people usually say that when you do not understand how they work. its a very simple covered call strategy with a twist. CC strategies are very straightforward and generate higher premiums the more volatile the underlying is . hope that makes sense....
@@PassiveIncomeInvesting one thing that doesn't make sense is that TSLY has more than triple the yield of YTSL. Yes it writes options on the whole portfolio instead of half, but they are well out of the money instead of at the money. And YTSL has a bit of leverage boost. I'll hold off until I fully understand the difference. Or maybe relegate it to my play money portfolio.
@@smallmj2886 When you don't own the underlying stock you actually have more free capital to purchase more call options. In a traditional covered call strategy you need to use your capital to actually own the underlying share, and then also buy the call options. In a synthetic CC strategy all of your capital can by used towards purchasing options so you can purchase more calls. Not sure if that's what is happening here but that in addition to writing calls on 100% of the portfolio would be one way to explain the higher yield.
If you buy a call and write a put on the same underlying at the same strike price your payoff is the same as if you held a long position in the underlying.
ZEGA does this so they can emulate the share price movement of ARKK and TSLA.
They then sell call options 5% to 15% out of the money to generate revenue which they then distribute to OARK and TSLY shareholders.
You can do this yourself with high volatility equities but it would be a lot of work. It's easier to pay the 0.99% fee and passively collect the revenue.
@@wickdness So buying the call and the put at the money gives them access to way more shares to sell calls out of the money than if they had actually bought the stocks. Hence the much higher return. Does this synthetic CC strategy add any sort of risk? If not, why isn't this done more?
If we use bond or treasury as collateral which in terms we do not own stocks. Why TSLY is coming down??
Game Changer Fund... Adrian, if we hold these in an RRSP There will be NO withholding tax ?
nope
And to make even more money you could sell monthly put on the underlying
Can we hold those in a TFSA without paying USA tax? Thank you !
no. In RRSP you don't pay that withholding tax.
@@jackjia8773 thank you much !!
Thanks for some great info.
Problem with TSLY is that....the decline of NAV which then offsets the dividends...this is not a sustainable in long term, it seems.
When is the best time to buy in to TSLY?
Will these be included in your Ultimate DIY Investing Package?
for sure, in the next update
Really, I wonder if retirees will consider putting some of their QYLD money into Yield Max funds. Maybe a mix of Yield Max is the way to go.
Thanks for the video! Big help on explaining these complicated subjects.
You're very welcome!
I have been looking forward to this video. Thanks very much Andriano. Great job.
My pleasure!
Distribution from yeildmax etf is subject to withholding tax?? I am holding it in my fhsa!!
yes
Just found you, my brother. USA/Maldives here. Look forward to catching up with your other videos. Please keep us up to date as the ETFs come to market, and if they are worth investing in vs the dividend. Thanks.
What happens if the market looses its appetite for calls or puts on these stocks? In theory you’ll be able to sell puts and calls in any market if you adjust your strike price but in reality the markets aren’t always liquid.
Related question: is there a risk that you could sell the long call but not be able to sell the mirror image short put?
Would you recommend holding this in RRSP or TFSA ?
In a RRSP due to the USA tax on distribution you will have to pay in your TFSA
@@alexandretellier1
Could you explain more please I am very new/ total beginner for example if we put 50k in TFSA can we buy Tesla and OArk and avoid paying tax ?
And which platform would you recommend?! Is wealth simple a good one ?! Greatly appreciated 🙏
@@moniryousefian8782 when you received US income in a TFSA you have a withholding tax of 15% (USD income only, 0% for canadian). Those new ETF are in USD. Therefore you are better off to invest in your RRSP where you don't pay any tax (USD or CND). The best platform in canada is Questrade for your accounts.
us listed = RRSP
Thank you for the Video its very helpful, I wanted bring to your attention that this fund has lost 33% in 6 months .There is an enormous capital erosion.
it just follows what the underlying is my friend.... its quite simple
@Passive Income Investing Thank you Adrian.
Thanks for such Great video! Is TSLY paying monthly or quarterly dividends?
monthly
Update: They just launched NVDY today after launching APLY two weeks ago.
yup and many more to come
This appears to be a way to get involved in options trading without the hassle. Something like owning RS without owning actual buildings.
How much tax would you need to pay on TSLY dividends in a Canadian RRSP? TFSA?
None in your RRSP. 15% in your TFSA is withheld.
You’ll pay income tax when you pull it out of your rrsp which might end up being more than 15%.
Too good to be true is almost always too good to be true. If it was even half true then it is a game changer.
Adriano, are you adding those to your personal portfolio? Are we going to see it in your next portfolio review?
find out soon
Can the above ETF’s be purchased through a Canadian broker such as Wealthsimple or Questrade?
Not sure about the two you mentioned, but BMO Investorline can buy those ETFs.
yes of course, its up to your broker
Thanks Adrian as usual.
Btw, I didn't know you have cat! I heard him meowing at the background lol
I do!
Thanks for the info Adriano! Keep us updated on these please. Now your videos are going to be "cat"egorized?
no choice as i already added them to my portfolio
Love your content, keep up the great work!
Hi does TSLY have the same risks as other etfs. Specifically that I buy $50000, that the worst that could happen is I lose $50000. I would be not getting a notice that I owe money by my broker. Thanks.
TSLY = Tesla , that's the best piece of advice i can give you