TSLY ETF, a Tesla-focused income strategy fund, offers high monthly dividends by selling call options.
But is it worth the risk? Let’s take a closer look.
📚 Table of Contents
- What is TSLY ETF?
- How It Generates Income
- Recent Dividend History and Yield
- Benefits and Investment Appeal
- Risks and Considerations
- Final Thoughts for Investors
1. What is TSLY ETF?
TSLY (Tesla Option Income Strategy ETF) is managed by YieldMax and aims to generate income by writing covered call options on Tesla (TSLA) stock. The ETF provides monthly dividends funded by the premiums collected from selling options on TSLA shares.
This strategy capitalizes on Tesla's notorious volatility while limiting potential upside from sharp stock rallies.
2. How It Generates Income
TSLY uses a covered call strategy, selling monthly call options on Tesla stock. The premiums collected form the basis for dividend distributions. This method benefits from:
- High implied volatility in Tesla
- Consistent premium income
However, investors sacrifice potential gains when TSLA rallies sharply, as the ETF’s upside is capped. On the downside, if TSLA drops significantly, TSLY's NAV also declines.
3. Recent Dividend History and Yield
TSLY pays monthly dividends. Here's a look at the most recent distributions:
| Month | Dividend (USD) |
| Jan 2024 | $1.1130 |
| Feb 2024 | $0.8092 |
| Mar 2024 | $0.8109 |
| Apr 2024 | $0.6841 |
| May 2024 | $0.6942 |
| Jun 2024 | $0.6448 |
| Jul 2024 | $1.0035 |
| Aug 2024 | $0.9661 |
| Sep 2024 | $0.8186 |
| Oct 2024 | $0.5986 |
| Nov 2024 | $1.2208 |
| Dec 2024 | $1.286 |
Total annual dividend: ~$10.31
Estimated yield (as of current price): 120.99%
(Source: stockanalysis.com)
4. Benefits and Investment Appeal
- 💸 Massive Monthly Income: Among the highest-yielding ETFs on the market
- 🔁 Consistent Payouts: Great for investors seeking regular income
- 📊 Tesla Volatility Utilized Smartly: Extracts value from Tesla’s price swings
- 🧩 Options Strategy Simplicity: Managed by professionals, requiring no investor involvement
5. Risks and Considerations
- ⚠ Tesla Risk Exposure: Heavily reliant on TSLA performance
- 📉 Capital Depreciation: No protection from underlying asset drops
- 🔒 Capped Upside: Cannot benefit from Tesla price rallies beyond the call strike
- 💰 Expense Ratio: 1.01% – relatively high for an ETF
- 🔄 Dividend Volatility: Payouts vary month-to-month depending on option premiums
This ETF is not ideal for long-term capital growth investors, but suits income-seeking traders aware of the risks.
6. Final Thoughts for Investors
TSLY ETF offers one of the most attractive yields on the market, leveraging Tesla’s volatility for consistent monthly income. However, its complex structure, capped gains, and reliance on a single stock demand caution.
💡 Best for: Experienced investors with an appetite for volatility and monthly income
🚫 Not recommended for: Conservative or long-term growth-focused investors
Always diversify and consult with a financial advisor before allocating significant capital to a high-yield, single-stock ETF like TSLY.