Technology stock enthusiasts know Advanced Micro Devices (NASDAQ:AMD) as a fierce competitor among American chipmakers. However, anyone seeking passive income opportunities may be disappointed to discover that AMD doesn’t pay a dividend.
YieldMax offers an intriguing solution with the YieldMax AMD Option Income Strategy ETF (NYSEARCA:AMDY). Known for bringing high-yield exchange traded funds (ETFs) to the market, YieldMax is attracting a great deal of attention with its AMD-centered AMDY fund.
YieldMax’s ETFs are sometimes controversial, and the YieldMax AMD Option Income Strategy ETF will garner strong positive and negative opinions. However, after we uncover the pros and cons of this fund, you’ll be well-positioned to decide whether AMDY is right for your portfolio.
AMDY: It’s Probably Not What You Think
While the YieldMax AMD Option Income Strategy ETF is indirectly based on AMD stock, it actually doesn’t hold any AMD shares. Instead, the AMDY ETF “uses a synthetic covered call strategy or a synthetic covered call spread strategy” to indirectly generate passive income from AMD stock. (The fund also invests in assets associated with government bonds and cash.)
This might surprise some prospective investors, and not everyone will understand the sophisticated options-trading strategies of the YieldMax AMD Option Income Strategy ETF. Nevertheless, it’s important to know that AMDY’s trading strategies involve a particular type of risk.
Specifically, the YieldMax AMD Option Income Strategy ETF entails a “limit on potential investment gains as a result of the nature of the options strategy it employs.” This means that even if AMD stock flies to the moon, the AMDY ETF’s share price will only rise by a limited amount.
It’s also possible for the YieldMax AMD Option Income Strategy ETF’s share price to decline sharply. So, if you’re seeking a fund that closely parallels the share-price moves of AMD stock, AMDY probably isn’t what you’re looking for.
We can use a real-life example to illustrate the share-price risks. As of August 11, 2025, AMD stock rose 42.63% year-to-date.
In contrast, the share price of the YieldMax AMD Option Income Strategy ETF declined 13.94% year-to-date. Hence, as you can see, the AMDY ETF certainly isn’t risk-free.
Mega-Yield, but No Guarantees
Another risk for the YieldMax AMD Option Income Strategy ETF is that its share price will be dragged down by the fund’s operating expenses. Currently, the AMDY ETF deducts 1.23% worth of annualized operating expenses.
On the other hand, the YieldMax AMD Option Income Strategy ETF advertises a yield that some investors won’t be able to resist. Believe it or not, AMDY features an annualized distribution rate of 83.55%.
Not only that, but the YieldMax AMD Option Income Strategy ETF pays out its cash distributions on a monthly basis. Consequently, investors will have frequent opportunities to reinvest the distributions if they want to do so.
But again, the 83.55% in annual yield isn’t just easy profits. Investors are subject to the aforementioned operating expenses as well as the possibility of share-price underperformance when compared to AMD stock.
Also, the YieldMax AMD Option Income Strategy ETF’s currently advertised distribution rate isn’t guaranteed to persist into the future. Indeed, the AMDY ETF’s annual yield could be reduced at any given moment.
That’s why it’s hasty to try to calculate your future profits with the YieldMax AMD Option Income Strategy ETF. There’s no telling what the future holds for a fund like AMDY, which is susceptible to unforeseeable changes.
The Verdict on AMDY
The worst way to approach the YieldMax AMD Option Income Strategy ETF is to think, “I like AMD stock and I like free money, so I’ll load up on AMDY right now.” This line of thinking is just a recipe for disaster if the investment goes awry.
It is definitely not recommended to overinvest the YieldMax AMD Option Income Strategy ETF. This fund has major risks that could lead to severe financial losses, so caution is warranted with the AMDY ETF.
Instead of backing up the truck, it makes more sense to only take a small share position in the YieldMax AMD Option Income Strategy ETF. That way, you’ll de-risk your portfolio instead of exposing it to profound risk of share-price loss.
And if you don’t like the risk-to-reward profile of the YieldMax AMD Option Income Strategy ETF, it’s fine to just avoid it. You might be better off simply buying AMD stock and staying away from mega-yield ETFs altogether.
