MSTY Dividend History: A New Way to Produce Yield

Dividend investors are perpetually weighing the tradeoff between yield and stability. Do you try to go for the highest yields and payouts while risking volatility, or do you stick with blue-chip stocks that have growth potential and that ever-sought-after stability? Once in a while, a new fund shakes up this paradigm, and MSTY is one of those disruptors. Instead of simply buying dividend stocks, MSTY generates income by selling options of a notoriously volatile stock, Microstrategy MSTR.

In this guide, we’ll break down how MSTY works, what its dividend history tells us, and how smart investors are using it as part of a well-rounded income strategy.

What is MSTY, and why are dividend investors paying attention?

MSTY is the YieldMax MSTR Option Income Strategy ETF. It doesn’t own a basket of dividend-paying companies but rather holds MicroStrategy stock and generates income by selling call options of the same stock. This makes it a single-stock ETF with an options-based income strategy, focused entirely on MicroStrategy.

Why is this exciting for dividend investors?

MSTY turns MicroStrategy’s high volatility, which is normally a red flag for income strategies, into a consistent source of yield. Since launch, MSTY has paid double-digit monthly distributions, which is almost unheard of for ETFs, especially those tied to a single stock. For example, if an investor had held $10,000 worth of MSTY during a month where it yielded 12%, they would have received around $100 in distributions that month alone. Instead of relying on traditional dividends, MSTY generates income through option premiums, using covered calls on MicroStrategy stock.

This lets investors potentially benefit from MicroStrategy’s price swings and Bitcoin correlation, without needing to own either directly.

MSTY dividend history

MMSTY launched in early 2024, and since then, it’s delivered a range of monthly payouts that have caught the eye of the investing world, and in particular those with a dividend or income investing strategy.

Here’s a breakdown of the monthly dividends MSTY has paid since inception:

These numbers translate to an estimated trailing 12-month dividend of over $27 per share, depending on monthly fluctuations. For an ETF currently trading around $22 per share, that implies a trailing yield in excess of 120%, a figure that stops most dividend investors in their tracks.

What does MSTY's divided history and performance mean for investors?

The fund earns income by holding MSTR and writing covered calls, turning volatility into monthly cash payouts. That’s what makes it so compelling; investors receive consistent, high-frequency income, which is ideal for reinvestment or meeting short-term financial goals. MSTR is a software company, but it’s better known for holding over $14 billion worth of Bitcoin on its balance sheet, making its stock price highly sensitive to crypto movements, which are fundamentally volatile.

That being said, just like anything with unusually high upside, it's not without its tradeoffs. If volatility dries up, so do the premiums, which means having a sitting president who moves the market up and down constantly with his tweets is great for the fund. And because MSTY gives up the upside when MSTR rallies, it’s not built for long-term growth. Still, as part of a diversified dividend strategy, MSTY can be a powerful tool for generating reliable monthly cash flow.

MSTY dividend breakdown: monthly + “special” qualifying distributions

Why does MSTY pay dividends monthly, and why is that a good thing?

Most dividend ETFs pay quarterly, but MSTY pays monthly, and that definitely matters. Monthly payouts offer better cash flow for anyone relying on dividends to cover expenses, and they also let investors reinvest sooner, which can speed up compounding. This can be especially advantageous for those who employ the DRIP strategy, which compounds and reinvests dividends. There’s a psychological edge, too. Getting paid every month can make income feel more stable, which helps with budgeting and staying invested during market swings. Outside of REITs and bond funds, that kind of frequency is hard to find, which makes MSTY a unique option for income-focused investors.

MSTY's “special” payouts

While MSTY doesn’t label its payouts as “special,” the sheer size of some monthly distributions (like $4+ per share) mirrors the effect of a special dividend. These are driven by option premium windfalls in particularly volatile months for MSTR. They’re not guaranteed and can swing widely.

Dividend growth vs. dividend consistency

Most dividend ETFs aim for steady growth, increasing payouts over time as a sign of business health. MSTY takes a different approach. It doesn’t follow a fixed schedule or aim for annual increases. Instead, its payouts change monthly based on the option income it generates from MicroStrategy’s volatility.

When MSTR is more volatile, MSTY collects higher premiums and distributes more income. When things calm down, payouts shrink. This makes MSTY’s dividend adaptive to the market, not tied to traditional growth metrics, something many income-focused investors actually prefer.

MSTY is best suited for investors who need income now. Like a contractor paid per job, some months pay more than others, but the income is steady overall. It’s not your slow-and-steady anchor—it’s the income accelerator. While it won’t raise payouts like a Dividend Aristocrat, it delivers consistent monthly cash flow that aligns with market conditions. That reliability in timing—not size—is what makes it valuable in a diversified portfolio.

MSTY dividend yield in context

How MSTY compares to other monthly dividend payers

When you look at MSTY’s yield next to other popular monthly income ETFs, the difference is massive.

To put it simply: MSTY pays out way more than its peers—sometimes 10 or 20 times more. But it does that using a completely different playbook, and it comes with more moving parts and more risk.

Can MSTY keep paying this much?

MSTY’s high yield is real, but it’s not guaranteed. It depends on how volatile MicroStrategy stays—less movement means less income. The strategy also relies on stable options markets. As long as conditions hold, MSTY delivers. But it’s built on a narrow set of factors, so long-term performance needs close monitoring.

How MSTY generates cash flow

MSTY doesn’t collect dividends from underlying stocks. Instead, it generates income by selling covered call options on a single stock: MicroStrategy (MSTR).

Monthly income model: how call premiums are collected

Here is a quick breakdown to show you how it works. Let’s assume MSTY owns 10,000 shares of MSTR, and each call option contract covers 100 shares.

That $150,000 is then distributed to MSTY shareholders as monthly income. The higher the volatility in MSTR, the larger the option premium. If MSTR’s implied volatility spikes, MSTY’s cash flow can go up even if the stock doesn’t move much.

The beauty of this model lies in the volatility of MSTR stock. MicroStrategy’s heavy involvement with Bitcoin and its relatively low trading volume make it one of the most volatile large-cap stocks on the market. That volatility means the call options it sells are extremely valuable, and the premiums are much higher than you’d find on a calmer stock like Apple or Coca-Cola.

So when MSTR is bouncing around, MSTY is raking in cash. But if the stock ever quiets down? Those juicy premiums shrink—and so do MSTY’s distributions.

Real-world scenario: $10,000 invested in MSTY vs. traditional dividend stocks

To understand MSTY’s income potential, let’s run a side-by-side scenario. We’ll assume you have $10,000 to invest and you’re deciding between MSTY and more traditional dividend-paying stocks or ETFs.

As you can see, MSTY’s income output is in a league of its own. You’re potentially generating over 12 times more income than with a stable REIT like Realty Income, and still significantly more than with a high-yield fund like JEPI.

How investors are using MSTY

MSTY may be a newer fund, but it’s already making its way into a wide range of dividend-focused portfolios. While the strategy is unconventional, investors are finding creative ways to make use of its high monthly income.

What are the risks of investing in MSTY?

As with any investment, the bigger the reward, the more you should understand the risks. MSTY’s dividend strategy is powerful, but not immune to market shifts.

Volatility declines

MSTY depends on MSTR’s volatility to generate income. When that volatility drops, whether because Bitcoin stabilizes, macro conditions change, or MicroStrategy becomes less reactive, the premiums shrink. And when premiums shrink, so do the monthly payouts.

NAV erosion

Much of MSTY’s distribution is classified as return of capital (ROC). Over time, this can lead to a declining net asset value (NAV). That’s not necessarily bad, but it means investors could be receiving high monthly income while their principal slowly drops.

Regulatory shifts or structure changes

If rules around derivatives or options-based ETFs tighten, MSTY’s model could come under pressure. The same goes for tax changes; if ROC gets treated differently, the fund’s appeal to income-focused investors may shift.

Limited growth potential

MSTY trades away upside in exchange for income. If MSTR doubles in value, MSTY won’t capture most of that gain. That’s the tradeoff of selling covered calls: consistent income, but limited growth. It’s not built for investors chasing capital appreciation.

Is MSTY a dividend stock worth holding?

If MSTY produces a 100% percent annual consistency, then it's definitely a dividend stock worth holding. But is that going to really happen? Remember, MSTY trades off of volatility, and although the underlying assets (BTC) are notoriously volatile, that doesn't mean it will be this way forever. Also, if MSTY's dividend yields drop, the fact that there is 0 growth upside could make this ETF less attractive. Think of MSTY as a power tool in your dividend toolbox. It does one thing exceptionally well: deliver income for the time being. while not being a particularly attractive buy-and-hold situation. At the end of the day you need to use it correctly. So,

FAQ

Can MSTY be held in a taxable account without heavy tax consequences?

MSTY’s distributions include a mix of ordinary income and return of capital (ROC). Holding it in a taxable account means you'd pay taxes on the ordinary income each year. To avoid annual tax bills on ROC, consider using a tax-advantaged account like a Roth IRA or HSA for MSTY.

What happens if MicroStrategy’s stock price spikes suddenly?

Because MSTY sells covered calls, a rapid MSTR price surge won't translate fully into gains for MSTY holders. The upside is capped at the strike price of the calls written. So while income remains, your capital appreciation will be limited.

How often does MSTY change its options strategy?

MSTY adjusts its covered call positions monthly, based on market volatility and MSTR price movement. This flexibility is built into its design to dynamically capture premium, but it also means distribution size can vary month to month.