What You Need To Know About CONY’s Outrageous 56% Dividend Yield

Core Viewpoint - YieldMax COIN Option Income Strategy ETF (NYSE:CONY) generates high-yield distributions through an options strategy on Coinbase Global (NASDAQ:COIN) stock, with an annualized yield approaching 56% despite significant sustainability concerns due to Coinbase's volatility and the fund's complex options strategy [1]. Group 1: Yield Generation Mechanism - CONY's income is derived from collecting option premiums based on the volatility of Coinbase stock, holding both long and short option positions, with significant holdings in COIN call options at $390 and $310 strikes expiring in December 2025, alongside Treasury bills [2]. - The fund maintains short put positions that represent 23.3% of its portfolio at a $390 strike, which are currently deeply underwater as COIN trades at $226.14, indicating substantial risk [2]. Group 2: Dividend Performance - Weekly dividends for CONY have collapsed by 82% from peak levels, coinciding with a 49% decline in Coinbase stock from its high of $444.64 [3]. - Total returns for the fund are negative 30% over the past year, despite the high yield of 56% [3]. - Dividend history shows extreme variability, with payments dropping from $2.79 per share in April 2024 to $0.06 by November 2025, and a modest recovery to an average of $0.50 weekly in December 2025, which remains 82% below peak levels [5]. Group 3: Coinbase Volatility - Coinbase's extreme volatility, with a beta of 3.69, drives the option premiums for CONY, as COIN moves nearly four times more than the broader market [6]. - Coinbase reported strong Q3 2025 results, with $1.87 billion in revenue and $433 million in net income, indicating a solid financial performance despite the volatility [6].