The YieldMax COIN Option Income Strategy ETF (NYSEARCA: CONY) offers a staggering 119.9% yield. Understand the mechanics behind this high-yield ETF, the associated risks, and whether it fits into your investment strategy.
Introduction
YieldMax’s COIN Option Income Strategy ETF (CONY) is down over 70% from its all-time high, yet it boasts an eyebrow-raising 119.9% yield. So, what gives? Is this one of those funds you buy for the income and ignore the price chart, or is it something you avoid altogether?
If you’ve been hunting for monthly income, mainly from ETFs, CONY has probably caught your attention. But before you jump in, let’s explore what it is, how it works, and whether it belongs in your income-focused portfolio.
What Is CONY?
CONY isn’t your traditional dividend-paying ETF. It’s an actively managed fund designed to generate income from selling covered call options on Coinbase stock (COIN). In addition to options premiums, the fund also invests in short-term U.S. Treasury securities, creating a hybrid between yield-chasing and capital preservation.
The catch? Most of CONY’s monthly distributions include a significant portion of Return of Capital (ROC)—that is, your own money coming back to you. While this has some tax benefits, it also limits long-term compounding and can obscure the fund’s actual performance.
Why Investors Are Talking About CONY
CONY is making headlines for a reason. It recently announced a $0.7351 per-share distribution (as of May 28, 2025), which annualizes to roughly 101%. Additionally, ETF inflows indicate growing investor demand, with 12.3 million new units added—a 9.1% increase from the previous week.
With monthly payouts that can reach as high as $1.05 per share and a portfolio backed by short-term treasuries and COIN options, the fund appeals to investors chasing income.
Financial Overview
As of June 18, 2025, CONY has over $1 billion in assets under management, with 148 million shares outstanding. The Net Asset Value (NAV) stands at $7.97, while the market price is higher at $8.71, indicating that investors are paying a premium for its high-yield potential.
Key Holdings
- Thirty-one percent of the fund is invested in short-term U.S. Treasury securities.
- Nearly 20% is allocated to COIN options with expirations in June and August 2025.
- The remaining assets back up the fund’s cash reserves and distribution strategy.
Distributions are declared monthly and fluctuate. So far in 2025, monthly payouts have ranged from $0.44 to $1.05.
Powered by Options—and Volatility
The secret sauce to CONY’s yield is COIN’s volatility. The more volatile Coinbase’s stock is, the higher the premium CONY can earn selling call options. However, if COIN becomes less volatile—or worse, trades sideways or drops—CONY’s yield could quickly shrink.
Additionally, if COIN rallies too aggressively, the fund risks losing upside due to assignment on calls, thereby capping growth. This trade-off is central to understanding why CONY exists: income now, but limited capital appreciation later.
Risks to Consider
Let’s not forget—this isn’t free money. Here are the key risks:
- Volatility Drops: Less volatility in COIN reduces premium income.
- Interest Rate Sensitivity: If interest rates rise, CONY’s treasury holdings could lose value (though most are short-dated).
- Investor Sentiment: If yield-hunters exit en masse, the ETF’s market price could fall rapidly below its NAV.
This is not a set-it-and-forget-it ETF. It requires regular monitoring, especially given its dependence on options income and market sentiment.
Valuation & Performance
When CONY launched in August 2023, it traded at $18.42. Since then, it has paid out $29.35 in distributions—more than the initial price—yet the current market price has dropped to $8.71. Investors seem to focus on income over appreciation, and that’s precisely how the fund is designed.
If current yields persist, new investors might expect about $14.10 in annual income, though that depends entirely on COIN’s price behavior.
How Does CONY Compare to Peers?
CONY’s closest competitor is MSTY, another YieldMax fund, which tracks MicroStrategy (a Bitcoin proxy). MSTY pays a lower distribution—around 91.79%—and carries a smaller 30-day SEC yield of 1.76%, compared to CONY’s 3.53%.
If you’re bullish on Bitcoin or Coinbase, both could be worth comparing. But be warned: these are speculative instruments built for yield, not safety.
Who Should Consider CONY?
CONY may appeal to:
- Income-seeking investors who understand the risks of options strategies.
- Traders are comfortable with volatile underlyings like COIN.
- Investors are looking for short-term yield plays rather than long-term capital growth.
It’s not for those who want stable, predictable income or low-risk investing.
Final Thoughts
CONY’s 119.9% yield is undoubtedly tempting, but it comes with asterisks. This is not a traditional dividend-paying ETF. It’s a trading vehicle built on volatility and options. If those dry up, so does the yield.
In my opinion, while the income is attractive, CONY isn’t something I’d hold for the long haul. But if you’re an experienced investor looking for a high-risk, high-yield opportunity, it could find a temporary home in your portfolio.
