This Nvidia ETF Has a Sky-High 77% Dividend Yield, but Should You Just Buy Nvidia Stock Instead?

The YieldMax NVDA Option Income Strategy ETF (NYSEMKT: NVDY) has received quite a bit of investor attention recently, and it isn't hard to see why. Not only does it offer exposure to Nvidia (NASDAQ: NVDA), which is arguably the most popular stock in the market right now, but it also offers dividend income, and lots of it. In fact, as of this writing, the ETF has an incredible 77% dividend yield based on its past 12 months of payouts.Of course, there's no such thing as completely safe 77% annualized returns from any investment, so there are some things that are important to know before investing. Here's an overview, and whether you might be better off just buying Nvidia stock instead.It might surprise you to learn that the YieldMax NVDA Option Income Strategy ETF doesn't actually own any Nvidia shares. It puts your money in Treasury securities and uses this as collateral to create income-generating option spreads. The fund's managers will typically do a combination of buying and selling calls and puts to create the desired income and exposure to changes in the stock's price.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool