Key Points

• ULTY has surged in popularity amongst investors dazzled by the 80%+ distribution yield, despite the stock price losing nearly 70% in 18 months.
• Loyal shareholders and a number of analysts think ULTY will climb back up, with some estimates as high as $18.00, according toAInvest.
• While $18 would be a 200% jump from the $5.75-$6.00 range at the time of this writing, a $7.00 upswing is feasible for several potential reasons.
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Few Exchange Traded Funds have generated as much controversy in recent memory as theYieldMax Ultra Option Income Strategy ETF (NYSEARCA: ULTY). It has captivated the enthusiasm of many dividend seeking investors with its high weekly dividends, despite a fairly high risk of capital erosion. 

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Launching in February 2024 at $20, ULTY has paid 126% in cumulative distributions and is presently at 86-88%. However, the market price has steadily fallen to the $5.75-$6.00 range at the time of this writing. The diehards are unperturbed, even though analysts have cut their ratings on ULTY. However, while the long term view is very much a coin toss as to whether or not ULTY can sustain itself, the shorter term prognosis is that the stock price will rise, and there are sensible and convincing underpinnings for that stance. 

The ULTY Difference

Unlike most YieldMax ETFs which track a single stock and generate dividend income from the underlying volatility with covered calls, ULTY has a portfolio of various volatile stocks, thus amplifying the model multiple times over for its current 88% distribution yield.

YieldMax has become one of the most renowned specialty players in the covered call ETF field, which can generate impressively large dividends through both direct and synthetic option derivatives. By and large, they are pegged to a particular stock, such as MSTY, its ETF for MicroStrategy. Those ETFs track their respective stocks and proportionately rise and fall within a ratio to the actual stock. The ETF experiences somewhat less volatility than the stock due to the option strategy, which generates the dividend income through premiums. The caveat is that the option places a cap on the ETF’s upside capacity. YieldMax does issue a disclaimer that a portion of original capital may be remitted as part of the dividend, which is understandable, especially when the market volatility calms down.

ULTY differs in several ways, which is why the dividend distributions are so high:

• Instead of one stock, ULTY carries a portfolio of up to 100 different volatile stocks with roughly 30 of them actively being the subject of option derivatives. 
• Unlike with MSTY, ULTY is not tied to a single underlying stock that it tracks. At any given time, ULTY’s portfolio can sell, add, or swap for other stocks that may begin to exhibit the desired level of volatility to make meaningful contributions to the portfolio and to shareholders.
• On average, about 30 stocks may have either direct or synthetic option combined short and long positions, but managers have discretion to reduce exposure to as low as 5 or expand beyond 30, if opportunities warrant. 

The ULTY Strategy Change

Nearly a year ago, ULTY made strategy changes to mitigate risk, and then began weekly dividends in March 2025, creating the current upswing in investor interest.

As ULTY is only 18 months old, shareholders have yet to recoup their investments through dividends, since the capital appreciation side has never kicked in. In terms of total return, ULTY lost 2.25% from its inception through February 2025. Additionally, distributions were, at the time, monthly, which is par for the course for other YieldMax ETFs, which operate on a monthly options expiration schedule. This did not go unnoticed by YieldMax. 

Starting in November 2024, ULTY introduced risk mitigation measures, including moving to an options collar strategy. This approach involved buying put options (in addition to writing calls) on individual stock holdings. ULTY sacrifices upside potential by selling call options, but the put options also limit potential losses. Additionally, ULTY reduced its synthetic options exposure and acquired greater ratios of actual underlying stocks in its portfolio.  

March 2025 saw a shift to a weekly dividend-payment schedule intended to reduce NAV declines related to distributions. Since the fund earns option income continuously, the weekly distribution schedule reduces the lag time between when it collects income and when it pays it out to shareholders. The weekly dividends sparked renewed interest and the word of mouth spread on Reddit and other DIY investor forums. 

From March 10 through Aug. 13, 2025, ULTY posted a total return of 27.7%, compared with 18.4% for the Nasdaq 100 index, a reasonable proxy for the type of highly volatile, technology-related stocks it typically buys. During this time, the fund’s NAV has ranged between $6.31 per share and  $6.08 per share, apart from a sharp fall in early April in response to the tariff announcements, along with the entire market, before  gradually climbing back up to its present level. Meanwhile, as of early August, ULTY saw an increase by 33.7% with an additional 118.5 million units. So, new investment is pouring in, undeterred by the steep price fall and perhaps encouraged that present levels are a bottom fishing opportunity. 

The Case For a ULTY Price Recovery

At 5.13%, Reddit is the largest stock position in the ULTY portfolio.

Apparently, although a consensus of analysts have almost uniformly cut their ratings on ULTY to a “hold”, there are some analysts who have bullish prognostications that go as high as $18, according to AInvest.  Some ULTY holders seem convinced that a price recovery back to $7.00  by year’s end is achievable and have posted on Reddit about it. This would be roughly +17%, and there are some fundamental justifications for this sentiment:

1) Portfolio Gains

At the time of this writing, the top largest holdings in the ULTY portfolio contain the following:

• Reddit, Inc.: 5.13%
• Upstart Holdings: 4.81%
• MicroStrategy Inc.: 4.64%
• NBIS: 4.60%
• NuScale Power: 4.47%

Since ULTY now holds actual stock positions instead of synthetics for its portfolio, the ETF’s upside capacity can more closely emulate those of MSTY and other YieldMax ETFs pegged to specific stocks. The above stocks’ performance and predictions are as follows:

• Reddit is up 128% over last quarter, and has a price target high of $250 (currently at $224)
• Upstart Holdings is presently at $61.93; Piper Sandler has a target of $90.00.
• MicroStrategy is presently at $335. Maxim Group has a price target of $500, Barclays $475, Canaccord Genuity $464, Bernstein $600, and Cantor Fitzgerald $697.
• Nebius Group (NBIS) is currently at $67.51. The consensus average price target is $89.40, with a high of $128.
• NuScale Power is at $32.67 at this time. Analysts’ upside forecast ranges are from $41.47 to $55.65.

2) Premium Offsets Have Held: As noted in aSeeking Alphaanalysis, the distributions have offset losses by roughly 97% as of mid-July. Therefore, long-term shareholders are still basically whole, the offsets have worked, despite the steep NAV drop, and the bloodletting may finally have been staunched. If the price floor has been established, then additional buying (based on aforementioned August statistics) and dividend payout consistency can also generate more positive word of mouth via social media, and thus drive higher market prices. 

3) A Prospective $6 Free-Ride: Speculative investors have noted the following scenario: the high weekly income from ULTY is such that an investor at $6 per share can effectively recover 100% of invested capital value in dividends in under 24 months, as long as the market avoids a bearish downturn. At that point, all ULTY generated income is gravy.  If it can sustain itself, the investor will continue to earn profits, rather than income (see explanation below). If it goes under, the investor still suffers no loss. 

4) Tax-Savings: For investors that are able to recoup their entire invested capital via ULTY dividends, there is an added bonus: all subsequent distributions would thus betaxed at a lower capital gains rate, versus being taxed as income.  

5) Relative Strength Index (RSI):As of August 1, 2025, ULTY had a RSI of 16.73, suggesting it was oversold, since the benchmark threshold is an RSI of 30. 

While $18 might be a pipedream target for ULTY based on current fundamentals and the market environment, a 17% rise to $7.00 is certainly within the realm of possibility, baked on the rationales cited above. However, whether or not ULTY wouldstayat $7.00 or continue to climb higher is another story. 

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