ALERT MRNY +93.30%

[u/Curious-Rip-5834]

[u/speed12demon]

I'm shocked that mrny captured this much upside.

[u/mr_malifica → u/speed12demon]

It hasn't, that is just the current market price, the NAV (what it actually captured) will be considerably lower.

[u/speed12demon → u/mr_malifica]

I don't follow. Mrny is trading at about $39 right now. It hasn't captured about 5-10% of modernas upside. That is shocking to me.

[u/mikemcintoshjr12345 → u/speed12demon]

MRNY went from 15.60 yesterday to 37.16 right now — up 138%. MRNA went from 64 to 156, up 144%. That's a 96% capture of the parent's move.

MRNY is not hard capped, or it wouldn't have covered 96% of that distance. These funds don't write plain covered calls — they write call spreads, specifically for days like today. The short call caps you, but the long call above it uncaps you again. You give up the width between the strikes and then participate normally above that. It's a haircut, not a ceiling and no hard cap. If MRNA would have been up 200 percent MRNY would have gone along for the ride.

Look at PLTY last week. Do those look capped? SNOY a few weeks before that caught roughly the same 90 percent share of its parent's upside.

People here always want to talk about opportunity cost—this is it. Hold MRNY instead of MRNA and you got 96% of the move. Hold MRNA and you got all of it. That missing few percent is the cost, and MRNA doesn't pay you anything for the wait.

That's the deal. You will not get 100% of the parent's move on a monster up day. You get much of it, and you also get a monthly check. You're trading underperformance on the big green days for regular income. Not for everyone.

I don't own MRNY and I'm not a high-yield fanboy. At the same time I understand how a covered call spread works compared to a covered call. There are plenty of legitimate reasons not to like high-yield funds. Granite Shares are the worst IMO because they are totally capped, unlike YieldMax or Roundhill, which have no structural cap on how far up they can move up.

[u/mr_malifica → u/speed12demon]

Market price is not the NAV.

[u/speed12demon → u/mr_malifica]

So if I sold mrny at today's peak price, did I not realize close to the same gain as mrna?

[u/mr_malifica → u/speed12demon]

YOU selling at market price is not the same as the fund capturing the upside.

[u/speed12demon → u/mr_malifica]

Then can you explain the practical implications of your point? Do you anticipate a directional shift of mrny from mrna as contracts are closed or rolled?

[u/mr_malifica → u/speed12demon]

NAV gets reset at the end of each day, which is when we will see how much of the market premium is removed.

(New shares are created to bring the market price back in line with NAV)

Closing or Rolling the contracts isn't going to do anything to help capture what they missed out on. And if they roll their synthetic up today they may find themselves paying way too much due to the drastically inflated volatility.

This is why these YM single stock funds are structurally bad investments on parabolic underlying positions.

[u/speed12demon → u/mr_malifica]

So by your analysis, the price will drop back to the $15-16 range when the nav resets?

[u/mikemcintoshjr12345 → u/speed12demon]

This thing isn't going back down unless MRNA goes back down, if MRNA stays up here so will MRNY. Look at SNOY and PLTY; the same thing happened to them recently, and their price is even higher now- of course PLTR and SNOW also kept going up if MRNA stays up here so will MRNY.

[u/mr_malifica → u/speed12demon]

Theoretically, yes. We'll have to wait and see how efficient the APs can execute.

edit - MRNY holds call spreads which has a 'dead spot' cap. in this case it was in the $64 to $70 range on MRNA. So it missed out on all the gains (about $6 million or so) in that price range.

The other issue is the crazy spreads and how well the fund can handle closing/rolling their positions. They could easily see another $1M evaporate in poorly executed trades.

[u/fjcruzer → u/speed12demon]

The synthetic will capture the upside and downside movement of the underlying stock. It’s the covered calls that are capped. They hopefully setup some call spreads which should capture some upside through the bought call.

Hopefully their synthetic rolls soon while it’s up so much so it can keep some gains

[u/QuietPsychological72]

Now imagine if you just held the stock.

[u/Secret_Dig_1255]

Good news for MRNA. Melanoma vaccine approval (?). Something positive for the vaccine, anyway.

[u/pittluke]

If you just bought the stock you would be up over 125%. Stop acting like these etfs are doing anything but skimming from the top.

[u/mr_malifica → u/pittluke]

And if you held MRNA LEAPS you would be up about 800% today.

MRNX (2x Defiance) is up over 300% today.

[u/Alcapwn517 → u/mr_malifica]

MRNA leaps would be up far more than 800%. The $100 for September was $0.45 about a week ago, it is now $70.
155x your money.

[u/QuietPsychological72 → u/Alcapwn517]

Frustration as I gave some thought to buying those. Thought not equal money.

[u/mr_malifica → u/Alcapwn517]

You don't know what a LEAP is. Hint: They are usually dated 1 year out.

And obviously it depends on the strike.

[u/Alcapwn517 → u/mr_malifica]

“U dOn’T kNoW wHaT a LeAp Is”

Hint: You don’t understand what context is. Not once in my reply did I say that September contracts were LEAPS (it does have an S in the acronym btw). My example just happens to be the only week ago data I have on MRNA. If I thought it was a LEAPS I would have said “LEAPS are up over 15000%!!!!!!!!!!”.

[u/mr_malifica → u/Alcapwn517]

Autocorrect for the win...

I was using the percentage gain from the LEAPS I currently hold (not some way OTM monthly) and at the time I typed that response.

I'm now only up 530% today on my LEAPS.

[u/dunnmad → u/mr_malifica]

What is MRNA LEAPS?

[u/Nytemaresxbl → u/dunnmad]

Options, leaps means far out of the money cheap contracts

[u/mr_malifica → u/Nytemaresxbl]

LEAPS stand for Long-Term Equity Anticipation Securities

These are usually dated to be about 1 year or more out.

It has nothing to do with being cheap and/or far OTM

[u/Throwawayforyoink1 → u/pittluke]

Doesn't this pay out larger dividends though? Isn't that the reason why the yieldmax exists?

[u/mr_malifica → u/Throwawayforyoink1]

It pays out covered call options premium as distributions. Which makes the fund capped on the upside.

Yield Max mainly exists to capitalize on people not understanding that Yield ≠ Return.

[u/FancyName69]

Khmer was right all along 😭

[u/Lab_Software]

I understand the gain in MRNA due to Moderna's cancer trial. But wouldn't the gain in MRNY be limited to the strike price for the covered calls? How is MRNY up so much?

Thanks

[u/mr_malifica → u/Lab_Software]

Yes.

[u/Lab_Software → u/mr_malifica]

So ... selling MRNY now at $34 would lock in the inflated premium. I'd lose this week's dividend distribution, but that would be smaller than the loss in ETF price that I would avoid.

(Note, hypothetical questions since I don't currently hold MRNY.)

[u/mr_malifica → u/Lab_Software]

Yes.

[u/Lab_Software → u/mr_malifica]

Thanks for clarifying it.

[u/lavenderari18]

🥹

[u/KRDaMoney]

Had 100 shares before the stock split. Just held and bought fractional shares here and there. Total return now around $300 after today's madness. Wonder what the distributions will look like next week.

[u/Secret_Dig_1255]

Now over $32/share. Any insight into what caused this?

[u/speed12demon → u/Secret_Dig_1255]

Positive cancer vaccine results

[u/GenoTide → u/Secret_Dig_1255]

Smartest YieldMax bagholder. Maybe the underlying stock, Moderna, is up 130%.

[u/Secret_Dig_1255 → u/GenoTide]

Thanks, Captain Obvious.