More Covered Writing ETF’s: Defiance’s MST, GLDY, QQQY, SLVY, USOY, and TLTY (Preview)

By Lawrence G. McMillan

YieldMax has a number of ETFs, in which they are generally long synthetic stock (long call, short put with the same terms) and then they sell call credit spreads, out-of-the-money against that synthetic stock.  Credit balances are invested in T-Bills (or equivalent) and dividends are paid monthly.  We looked at MSTY, CONY, NVDY, and TSLY, which have as their underlyings MSTR, COIN, NVDA, and TSLA, respectively.  Our conclusion was that these are attractive approaches to a taxable income stream as long as you have faith in the underlying – which is Bitcoin in the cases of MSTR and COIN.

More recently, we looked at some of the Defiance zero-day-to-expiration (0DTE) ETF’s on $SPX (SDTY), $NDX/QQQ (QDTY), and $RUT (RDTY).  We were less impressed with these because instead of using synthetic stock, Defiance is paying cash for really deeply in-the-money calls to establish an equivalent stock position.

The MST ETF on MSTR:

Today, we are going to look at a new listing by Defiance – a leveraged, covered call writing strategy in MSTR.  The ETF is MST.  This ETF was listed on May 2nd, 2025.

Defiance states: “MST aims to deliver approximately 150% to 200% of MicroStrategy’s daily price performance, capitalizing on its volatility and growth potential. [Also,] By utilizing a credit call spreads [sic] strategy, the ETF seeks to generate high income, which is distributed to investors every week, providing regular cash flow and a potential buffer against declines.”

So, they are leveraging the long stock and selling call credit spreads against it.  Looking under the hood, we find the same problem we had with...