A Closer Look at YieldMax’s 0DTE ETFs: SDTY, QDTY, and RDTY (Preview)

By Lawrence G. McMillan

We have run a couple of articles about the various covered writing ETFs, most of them listed at Yieldmax.com.  We reviewed CONY, MSTY, NVDY, and TSLY, which are covered writing ETFs based on COIN, MSTR, NVDA, and TSLA, respectively.  They are generally interesting, and it you like the underlying they are worth owning in your portfolio.  For the purposes of this article, we are going to refer to these ETFs as the “standard” ETFs.

You can find all pertinent information at: https://www.yieldmaxetfs.com

There is a relatively new twist on these: a 0DTE (zero Days To Expiration) ETF.  Yieldmax has listed these on $SPX (SDTY), $NDX/QQQ (QDTY), and the Russell 2000/$RUT (RDTY).

Background: This is just a quick review of what the “standard ETFs” are.  They are comprised of synthetic long stock, created by the underwriter by buying a call and selling a put with the same terms.  Then he sells a call credit spread out-of-the-money against that, expiring a week or so in the future.  Once the credit spread expires, a new one is sold in its place.  Dividends are paid monthly and have been substantial on these various high-volatility stocks...