Confession time: I went ahead and did something wacky with $100,000 in my portfolio. Instead of parking that six-figure block of cash into a sensible index fund, I threw it into a high-risk high-yield exchange traded fund (ETF).
Maybe you’re thinking about doing the same thing with a smaller amount of capital. Before you jump into the deep end with a mega-yield ETF, you’re probably curious what happened to my $100,000 wager on one of these risky funds.
When I reveal the ETF that I chose to bet $100,000 on and its sky-high yield, you’ll either think I’m brilliant or completely reckless. Most importantly, you can see how my wild experiment turned out and gather some valuable takeaways if you’re considering a similar full-speed-ahead strategy.
It’s natural for investors to try to find shortcuts to wealth. Buying and holding large-cap stocks requires patience, and there’s a slew a financial products that can entice traders with a possible fast track to profits.
Take Tesla (NASDAQ:TSLA | TSLA Price Prediction) stock as an example. Its price rises during most years, but TSLA stock doesn’t pay any dividends or other cash distributions directly to the shareholders.
This may be disappointing to passive income collectors. Surely, there must be a way to generate extra income from Tesla stock instead of just having to settle for a simple buy-and-hold strategy — right?
Indeed, there is a fund that fulfills the desire to derive extra income from Tesla stock and potentially fast-track the pathway to profits. It’s called the YieldMax TSLA Option Income Strategy ETF (NYSEARCA:TSLY).
This isn’t to suggest that YieldMax purposely provides shortcuts for investors. However, YieldMax does offer a variety of ETFs that could derive extra income from individual stocks that aren’t known for high dividends.
Thus, instead of using the tried-and-true strategy of buying $100,000 worth of Tesla stock and holding it for a year, I bought and held $100,000 worth of the TSLY ETF. Unfortunately, I was filled with hope but wasn’t really prepared for all of the possible outcomes.
To sum it up quickly, the YieldMax TSLA Option Income Strategy ETF doesn’t directly hold Tesla stock shares. Instead, it replicates the effect of Tesla stock ownership by using synthetic options-trading strategies.
Then, the TSLY ETF will generate income by selling covered call options and/or call option spreads. This makes it possible for the YieldMax TSLA Option Income Strategy ETF to provide cash distributions to the shareholders every week.
Currently, the TSLY ETF advertises an expected annualized distribution rate of 49.4%. The YieldMax TSLA Option Income Strategy ETF previously paid out cash distributions monthly, but it switched to weekly distributions in October 2025.
During the past year, the TSLY ETF’s annualized distribution rate has varied but hasn’t strayed too far from its current rate. But even if we assume that I achieved a 50% cash distribution rate during the past 12 months, this doesn’t mean that I booked a 50% overall profit.
A drawback of the YieldMax TSLA Option Income Strategy ETF is that selling covered call options can limit the upside potential of the share price. Not only that, but when the TSLY ETF pays out a cash distribution, you can expect the fund’s share price to decline by the dollar amount of that cash payout.
I didn’t consider these issues, so I didn’t anticipate the net results I achieved after a year of investing $100,000 in the YieldMax TSLA Option Income Strategy ETF. Again, even if I collected $50,000 in distributions based on a 50% distribution rate, I took a deep haircut on the share price.
Over the past year, the TSLY ETF’s share price fell 29%. Consequently, at the end of this experiment, a $100,000 investment was worth slightly more than $120,000.
During that same time frame, I could simply have bought and held Tesla stock shares and gained 47%. Instead of trying to fast-track my gains with complicated options-trading strategies, I could have just bought TSLA shares and turned $100,000 into $147,000.
This just goes to show that faster strategies aren’t always the best ones and you don’t have to chase ETFs with the highest advertised yields. In terms of opportunity costs, I paid a hefty price for my $100,000 trade.
When used properly, YieldMax products may still be worthwhile additions to your portfolio. Just be sure to read each fund’s prospectus carefully and weigh the risks against the possible rewards. Otherwise, you could make the same costly and unnecessary mistakes that I did with the TSLY ETF.
