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YieldMax PYPL Option Income ETF yields 72% but loses 49% amid PayPal's struggles

Market News
09 Apr 2026
24/7 Wall Street
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Bearish
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YieldMax PYPL Option Income Strategy ETF (PYPY) uses a synthetic covered call strategy on PayPal, generating a high 72% yield through weekly income but capping upside potential. Despite PayPal's stock dropping 20% in the past year and 82% over five years due to earnings misses, leadership changes, and lawsuits, PYPY's total return loss is mitigated to 23% when factoring in distributions. Most distributions are return of capital, reducing cost basis and creating future tax liabilities. The fund suits investors who believe PayPal has bottomed and want income over capital gains, but it carries downside risk if PayPal's troubles continue and limits gains if the stock rebounds sharply.

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