TSLY Pays More Each Week Than NVDY but Holders Are Losing Money Faster
Two nearly identical ETFs built on the same structure pay out weekly cash, yet one is quietly eating its own investors alive while the other holds up. The difference comes down to a single variable hiding in plain sight.
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The YieldMax NVDA Option Income Strategy ETF (NYSEARCA:NVDY) and the YieldMax TSLA Option Income Strategy ETF (NYSEARCA:TSLY) are as close to a controlled experiment as retail exchange-traded funds get. Same issuer, same Tidal Trust II series, same synthetic-long-plus-short-call structure, same T-bill collateral, same weekly cash. The only variable is the underlying stock. That single difference produced a total-return gap of more than 30 percentage points over the past eight months, explaining why treating these two funds as interchangeable income plays misreads them.
For readers who want the mechanical plumbing, we covered how these YieldMax option-income wrappers work on July 30. The point here is what the strategy does when you swap the engine underneath it.
Same Machine, Two Different Fuels
Both funds hold Treasury bills as collateral and layer a synthetic long plus short calls on the reference stock. NVDY holds 20.6% in U.S. Treasuries and 11.5% direct Nvidia shares, wrapped in a rolling call ladder. TSLY is built almost entirely on Treasury bills, with roughly 23% weights across five separate T-bill CUSIPs collateralizing Tesla-linked options.
A call-writing program needs a steadily trending underlying to work. Premiums stay rich, the stock does not repeatedly gap past strikes, and the fund keeps most of its net asset value (NAV) intact. A violently two-sided underlying forfeits the upside tail while absorbing nearly all of the downside. Nvidia in 2026 has been the former case; Tesla has been the latter.
Where the Divergence Shows Up
NVDY is down 13.9% year to date and 23.7% over the trailing year, closing at $12.59 on August 20. TSLY is down 39.3% year to date and 41.6% over one year, closing at $22.06. Those figures are price-only. Add distributions and NVDY’s total return widens further, while TSLY’s headline payout barely offsets the NAV erosion.
Distribution Rates Versus Outcomes
NVDY’s annualized forward distribution is $1.44, with a trailing 12-month payout of $7.1285 and a most recent weekly of $0.12. TSLY’s annualized forward is $2.43, trailing 12-month is $14.313302, and the latest weekly is $0.2025. TSLY’s distribution rate looks fatter, but that is a rate on a shrinking base. The 2026 payouts dropped from $0.3658 in early January to $0.2025 in late August, tracking the NAV lower.
YieldMax prospectus language is explicit: distributions may include return of capital, and when distributions exceed total returns, NAV falls and future dollar payouts shrink with it. In a taxable account, that ROC reduces cost basis rather than representing real income.
Opportunity Cost Against the Underlying
Nvidia holders captured the AI rally directly. NVDY investors received cash but ceded the tail above the short strikes. Tesla shareholders rode a choppier tape that punished a capped-upside, uncapped-downside wrapper. The fund forfeited the rebounds and absorbed the drawdowns.
Head-to-Head Snapshot
| Metric | NVDY | TSLY |
|---|---|---|
| Underlying | Nvidia | Tesla |
| Price (Aug 20, 2026) | $12.59 | $22.06 |
| YTD price change | −13.9% | −39.3% |
| 1-year price change | −23.7% | −31.6% |
| Forward annual distribution | $1.44 | $2.43 |
| Net assets (Apr 30, 2026) | $1.4B | $837.2M |
| Expense ratio | 1.09% | 1.07% |
Verdict
For an investor focused on monthly cash and willing to accept that the payout floats with the underlying, NVDY has earned its place in an income sleeve this cycle because Nvidia’s trend rewarded the call-selling engine. TSLY has not. Investors focused on total return have generally been better served by holding the underlying stock rather than the option-income wrapper. Investors seeking only income should understand that TSLY’s higher distribution rate has been partly funded out of its own NAV. What would flip the recommendation is a regime change: if Tesla enters a sustained uptrend and Nvidia chops sideways, the ranking reverses. The outcome here was driven by the underlying rather than the strategy.
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Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.
Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.
Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.
Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.
