NVDY Sells NVIDIA’s Best Days Each Month to Fund Its 60 Percent Distribution

YieldMax NVDA Option Income Strategy ETF (NYSEARCA:NVDY) sells the right to NVIDIA’s biggest up moves each month and hands you the option premium as income. The fund currently trades around $14 and manages $1.82 billion in assets. Does selling NVIDIA’s best days actually pay enough to make up for the days you sold?

What you are actually buying

NVDY uses a synthetic covered call structure. It writes options on NVIDIA while holding Treasuries and a partial direct stock position rather than a one-to-one share position behind every contract. The portfolio holds a complex mix of Treasuries, layered with several short and long NVIDIA call options at different strikes and expirations. The Treasuries earn interest, the synthetic structure tracks NVIDIA, and the short calls collect premium paid to shareholders. Think of it as renting out NVIDIA’s ceiling.

That premium funds an aggressive distribution schedule. YieldMax shifted NVDY from monthly to weekly payouts late in 2025, and in 2026 the fund has paid weekly amounts ranging from $0.0848 to $0.2072 per share, all declared in a single January 7, 2026 announcement covering the year. Per YieldMax’s May 2026 distribution composition, 100% of recent payouts have been classified as income rather than return of capital, which matters for taxes.

All you need to do is that it turns NVDA’s movements into a weekly income stream.

Does it deliver?

Over the past 12 months, NVIDIA itself returned 67%. This is right before an earnings call and will likely change significantly. Anyhow, it does not matter, since NVDY will likely keep trailing.

NVDY, even with distributions reinvested, returned 58% in a year. That gap is narrower than the marketing critique would suggest. Investors who held NVDY through this stretch got the bulk of NVIDIA’s upside plus weekly checks, because NVIDIA’s gains came in a steady grind rather than violent moonshots that would have slammed into the short call strikes.

And that dividend reinvested figure isn’t the Trump card you think it is. If this ETF is barely keeping up with NVDA with dividends reinvested while shrinking the principal massively, it’s a losing game either way. If you take the dividends, you keep losing your principal. And if you keep reinvesting, you’re worse off compared to if you just bought NVDA.

GraniteShares 2x Long NVDA Daily ETF (NASDAQ:NVDL), the leveraged counterpart, returned 116% over the same year. JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ:JEPQ), which writes covered calls across the Nasdaq-100 and carries NVIDIA at 7.4%, returned 27% with a 0.35% expense ratio. NVDY sits between them, at 1.09% in fees, charging roughly three times what JEPQ does for a single-stock bet.

More tradeoffs that bite

1. Asymmetric capture in big months. The bull case assumes NVIDIA grinds higher. In a month where NVIDIA pops 20% on an earnings surprise, the short calls cap participation hard, and NVDY typically captures less than half that move.
2. Tax drag. NVDY’s distributions are taxed as ordinary income, while NVIDIA shareholders pay long-term capital gains rates if they hold past a year. In a taxable account, the after-tax math gets uglier fast.
3. Distribution variability. Weekly amounts swing based on option premium availability, which depends on NVIDIA’s implied volatility. A calm NVIDIA means smaller checks. The 60%-plus headline yield is backward-looking, not promised.

Who this fits

NVDY makes sense as a small income sleeve, where you put a small and unserious amount into it. This ETF might be a fit for an investor who wants NVIDIA exposure inside a tax-advantaged account and genuinely values weekly cash flow over compounded growth.

The synthetic covered call structure is legitimate, and the recent 12-month result shows it can keep pace with NVIDIA in a steady tape. Anyone who believes NVIDIA has another doubling left should own NVIDIA, or accept that NVDL exists for a reason. JEPQ is the cheaper, more diversified cousin for income-first investors who do not need single-name concentration. NVDY sells NVIDIA’s best days for a living. Make sure you actually understand the mechanics before you buy this, because it’s not for your regular income investor.