MSTY ETF lost nearly 70% in a year despite high yield, showing risks of covered-call strategy on volatile stock.

The YieldMax MSTR Option Income Strategy ETF (MSTY) dropped about 69.7% over the past year, from $41.02 to $12.27, despite paying high distributions. This ETF sells call options on MicroStrategy stock, capping upside gains while exposing investors to full downside losses, which hurt returns amid MSTR's 76% stock decline. Distributions are mostly taxed as ordinary income, adding tax drag without protecting capital. Investors should focus on after-tax total returns rather than headline yield, as MSTY's structure creates a challenging risk-reward profile compared to direct MSTR ownership or diversified covered-call ETFs.