Firm files for yield-bearing ETF based on the MicroStrategy stock

YieldMax, an exchange-traded fund (ETF) provider firm specializing in single stock option ETFs, is looking to add to its list of products with an ETF based on the MicroStrategy's stock.

The company filed to launch the yield-bearing ETF with the United States Securities and Exchange Commission (SEC) on December 7.

YieldMax’s MSTR Option Income Strategy ETF (MSTY) will be listed on NYSE Arca, Inc. in 2024 if approved by the SEC. Here's ETF analyst James Seyffart's reaction to the news.

According to details in the filing, MSTY will offer a “combination of standardized exchange-traded and FLexible EXchange (FLEX) call and put option contracts.” The ETF will not hold any MSTR, rather it will be a traded derivative based on MicroStrategy’s shares.

While MSTY is an options ETF for MSTR, YieldMax says its performance won’t mirror that of MSTR’s price. Among things to bring about performance differences will be the changes in the MSTR options contracts value as held by the fund and changes in US Treasuries.

Holders will get monthly payouts in cash distributions.

YieldMax currently offers 18 such ETF products based on the stocks of Apple, Tesla, Microsoft, Amazon and Nvidia.

MicroStrategy's Bitcoin bet

MicroStrategy has been one of the top performing stocks in the market year-to-date. MSTR has gained 293% YTD, with the company’s stock surging alongside that of Bitcoin (BTC). Bitcoin price has increased more than 160% year-to-date, and was trading around $43,600 on Friday after retreating from highs above $44k.

Michael Saylor, the founder of MicroStrategy, recently revealed that his company had acquired another 16,130 bitcoins, bringing the firm’s total haul to 174,530 BTC. The company’s total holdings were acquired at a total of $5.28 billion, with the average purchase price at $30,252.

With the price of Bitcoin above $43k, Saylor’s BTC bet boasts paper profits of over $2.2 billion.