YMAX Dividend History: A Guide For Investors

If you have friends who can't shut up about the yield they are getting on their YMAX holdings, you have come to the right place. YMAX's dividend history is indeed impressive, but YMAX itself hasn't been around that long. So, is YMAX something that you can hold onto to produce an amazing yield every year going forward, or is this a fund that looks all shiny right now, but in reality has a dark underbelly that no one talks about? Let's break it all down below.

YMAX dividend history

Since its July 2023 launch, YMAX has delivered consistent monthly dividends, with quarterly totals often translating to annualized yields above 20%. The payouts fluctuate with market volatility, but the fund’s covered call strategy has kept distributions high compared to traditional dividend ETFs.

What is YMAX?

YMAX is an exchange-traded fund (ETF) that tracks the Nasdaq-100 and uses a covered call strategy to generate monthly income. It's popular with dividend investors as the dividend is substantial, and although it uses covered calls rather than company cash-flow, the fact that it tracks the Nasdaq-100 and not something more exotic like bitcoin or meme stocks has given it credibility. Launched in July 2023 as part of the YieldMax ETF family, it differs from other YieldMax products that focus on individual stocks like Tesla or Apple by targeting the entire technology-heavy index, which includes major companies such as Apple, Amazon, Nvidia, and Meta.

Instead of aiming for capital gains from tech sector growth or deriving income from dividends related to company earnings, YMAX earns income by selling covered call options on the index and distributing the option premiums to investors each month. This structure turns a traditionally growth-focused benchmark into a high-yield income vehicle, with annualized yields that can exceed 20%, offering investors regular payouts, competitive yield potential, and the simplicity of trading a single ticker.

Understanding YMAX’s strategy: Covered calls for yield

Ok, the elephant in the room here for everyone reading this is that the yield sounds outrageously high. Most of the time, high-yielding income-focused ETFs rely on company cash flow and dividend distribution to pay the investor. YMAX does something differnet; it uses covered calls (similar to MSTY with BITCOIN) that are layered over Nasdaq 100 exposure to turn volatility into monthly payouts. And this is the key: volatility is what drives the income of YMAX first and foremost. This means it doesn't matter if the NASDAQ is up or down; it matters that the NASDAQ is both UP and DOWN in a short period of time; that's volatility.

How covered call ETFs work

Covered call ETFs turn stock market volatility into cash flow. Here’s how it works: the fund holds shares (or synthetic exposure) to an index or stock, then sells call options on those holdings. The buyer of the option pays a premium for the right to buy those shares at a fixed price (the “strike”) within a set time. If the stock or index stays below that strike, the option expires worthless and the seller keeps the premium. If it rises above the strike, the upside is capped, but the seller still keeps the premium collected.

Think of it as renting out your portfolio’s future gains in exchange for income today. YMAX repeats this process every month on the Nasdaq-100, where volatility tends to make premiums high. That’s why its payouts can exceed 20% annually.

In this model, the covered call smooths returns by reducing losses in flat/down markets while limiting big wins in strong rallies. YMAX leans into this trade-off, maximizing monthly premium income even if it means giving up part of the Nasdaq-100’s potential upside.

Why covered call strategies shine in range-bound markets

Most long-term investors rely on capital appreciation: Buy low, sell high, and let time do the work. But covered call strategies work differently; they want volatility. They’re built for environments where:

• Markets are choppy or flat
• Volatility is high
• Predictable income is more important than big gains

In these conditions, covered call ETFs like YMAX often outperform other funds that simply track an index, because they’re being paid to wait. They don’t need stocks to go up, just to not skyrocket past the strike price. In a way, it’s like turning stock market indecision into a monthly paycheck. Everyone's anxiousness and indecisiveness is money in your back pocket.

YMAX's unique structure

YMAX takes a bit of a different route than most covered call ETFs, which trade call options on a specific underlying stock. Instead of directly owning Nasdaq-100 stocks, it uses synthetic exposure through swaps to replicate the index. This setup is considered leaner and makes it easier for the fund’s managers to run their options strategy across the entire index, pulling in monthly premium income with fewer moving parts. Below are some ways in which YMAX's structure makes it unique:

Monthly dividends

YMAX pays investors every 30 days, which makes it especially appealing for anyone who needs a predictable cash flow. Think retirees, income-focused investors, or those funding regular portfolio withdrawals.

Tax reporting simplicity

There’s no K-1 form to wrestle with at tax time. YMAX reports distributions on a standard 1099-DIV, keeping the paperwork as simple as the trade itself.

Ordinary income tax treatment

Most payouts from YMAX are taxed as ordinary income, not at the lower qualified dividend rate. In taxable accounts, that can mean a bigger tax bill, which is why many investors prefer holding it inside a Roth IRA, 401(k), or other tax-advantaged account.

Actively managed options overlay

YMAX isn’t just on autopilot. The fund’s managers actively choose when to sell calls, what strikes to set, and how far out to go. That hands-on approach gives them room to adapt and potentially capture more yield when markets get volatile.

 

A quick side-by-side: YMAX vs a typical dividend ETF

 

How YMAX compares to traditional dividend ETFs

Many of you reading this will already be holding traditional dividend ETFS, and that's a fundamental piece of an income investing strategy. Not all dividend ETFs play the same game, however. Some aim for steady, inflation-beating payouts from blue-chip companies. Others prioritize yield above all else, even if it means sacrificing long-term growth. YMAX falls into the latter camp, making it important to compare it against other popular options like SCHD, JEPI, and QYLD to understand its role.

YMAX leads in yield, often doubling or tripling traditional dividend ETFs, but that doesn’t guarantee strong total returns or capital preservation. If markets trend lower or volatility dries up, its income advantage may shrink.

When YMAX works, and when it doesn’t

Like any tactical ETF, YMAX has its sweet spots and its blind spots. Here’s a breakdown:

 

Real-world scenario: Investing $25K in YMAX over 12 months

Theory is great, but what does YMAX look like in practice?

Let’s walk through a simple, realistic scenario. You invest $25,000 in the alpaca trading platform into YMAX, hold it for 12 months, and collect the monthly dividends without reinvesting them. Based on estimated data from 2023, here’s how it could play out:

What this means for your portfolio

By the end of the year, your total account value might look something like $30,000, assuming the NAV drops modestly but dividends remain consistent. While your principal declined slightly (from $25K to ~$24K), the $6,000 in cash income more than made up for it.

Final thoughts: YMAX is the latest in high-yielding covered call funds

Everyone likes a nice fat dividend check, but usually that's based on company cash flow, and not trading structured financial products like covered call options. It's important to note that, similar to MSTY, the high yield derived from YMAX is based on market volatility, not stability. Be aware of this, as although choppy waters can bring big gains in the case of YMAX, choppy waters can also be increasingly difficult to navigate.

FAQ

How is YMAX different from QYLD?

While both YMAX and QYLD use covered call strategies, YMAX targets the Nasdaq-100 through synthetic exposure using swaps, whereas QYLD holds the actual Nasdaq-100 stocks. This gives YMAX a leaner, more tactical structure focused on maximizing monthly income. QYLD is more traditional in its holdings and slightly more conservative in yield targeting. Both serve income investors but use different structural approaches.

Can YMAX be used for short-term trading?

Technically, yes, but it’s not designed for it. YMAX is optimized for monthly income generation, not capital gains. Traders looking for fast price movement may be disappointed, especially since upside is capped by its options strategy. It's better suited for tactical yield roles than short-term speculation.

Does YMAX pay qualified dividends?

No, YMAX distributions are generally taxed as ordinary income because they come from options premiums, not from traditional dividend-producing stocks. This makes it less tax-efficient in taxable accounts. For this reason, many investors prefer holding YMAX in tax-advantaged vehicles like Roth IRAs or traditional IRAs to avoid unnecessary tax drag.

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