Quick Read
NVDY’s distributions have collapsed from $2.62 monthly in March 2024 to roughly $0.10 per week in 2026 as NVIDIA’s volatility moderated and NAV eroded.
NVIDIA surged roughly 24% over the past year and 854% over five years, but NVDY structurally cannot capture those gains because sold calls cap every rally.
NVDY suits income-focused investors who accept a slowly shrinking NAV, but a dividend growth ETF or personally selling covered calls delivers better total returns.
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YieldMax NVDA Option Income Strategy ETF (NYSEARCA:NVDY) monetizes NVIDIA‘s (NASDAQ:NVDA) volatility through a synthetic covered-call strategy, converting option premiums into weekly cash distributions. The fund once ranked among the highest-yielding listed ETFs, but the critical question is whether those distributions represent durable income or a slow-motion return of your own capital. The answer, based on the May 2026 fact sheet and recent distribution data, is more nuanced than the headline yield suggests.
How NVDY Manufactures Its Yield
NVDY holds a small slice of NVIDIA stock (11.5% of net assets) and uses options to synthetically replicate exposure, then sells short-dated calls at strikes near NVIDIA’s spot price to harvest premium. The rest of the portfolio, over 80% in Treasury Bills and a First American Government Obligations money market position, sits as collateral and earns short-term interest.
The income you receive blends option premium (which scales with implied volatility) and T-Bill yield. When NVIDIA trades around 40 vol, premiums are rich and distributions swell. When volatility compresses or NVIDIA rallies past the short strike, the math turns against holders. NVDY caps upside at the sold strike, meaning if NVIDIA rises 15% in a month, the fund captures 3% to 5% while the call is assigned or rolled at a loss.
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The Distribution Trend Tells the Real Story
NVDY’s payout history is the single most important safety signal. In March 2024, the fund paid $2.62 per share in a single month. By mid-2024, monthly distributions were still running above $1.00. By the July 2, 2026 ex-date, and the weekly payment was $0.0984, with recent weeks clustering between $0.08 and $0.15. Even annualized across 52 weekly payments, the current run-rate falls well short of the 2024 pace.