"AMDY does not hold shares of Advanced Micro Devices directly. Instead, it runs a synthetic covered call strategy, using options to replicate AMD exposure while simultaneously selling call options on AMD. The premiums collected from selling those calls are what fund the distributions. When AMD's stock is volatile, options premiums are higher and distributions are larger. When volatility is low, premiums compress and distributions shrink."
"The distribution history tells a clear story of erosion. In 2024, AMDY paid an average of $0.84 per distribution across 12 payments, totaling roughly $10.08 for the year. By 2025, that average fell to $0.57 per distribution, with the full year totaling $6.85. In 2026 year-to-date, the average has dropped further to approximately $0.39 per payment."
"The covered call structure caps upside participation in AMD rallies while offering no protection on the downside, a structural disadvantage noted by analysts who describe AMDY as having 'full downside exposure with capped upside.'"
AMDY uses a synthetic covered call strategy to generate income by selling call options on AMD rather than holding shares directly. Distributions depend entirely on options premiums, which fluctuate with market volatility measured by the VIX. Distribution payments have declined significantly: averaging $0.84 per payment in 2024 ($10.08 annually), dropping to $0.57 in 2025 ($6.85 annually), and further to $0.39 year-to-date in 2026. The fund's structure creates a fundamental disadvantage: it captures full downside risk from AMD price declines while capping upside gains during rallies. AMDY has declined 11.2% year-to-date and 18.6% over the past month, tracking AMD's own weakness, demonstrating that high distributions cannot offset NAV erosion.
Read at 24/7 Wall St.
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