HMYY generates synthetic yield on Hims & Hers Health (HIMS) stock through a covered call strategy, targeting monthly income far above what the underlying stock pays. This single-stock ETF trades growth potential for immediate cash flow.
How It Works
The fund holds HIMS shares and systematically sells call options against the position, typically at 5-10% out-of-the-money with 30-45 day expirations. Premium collected from option sales creates the 15% yield, paid monthly. The strategy caps upside at the strike price but keeps downside exposure intact, making this a bullish-but-capped bet on HIMS.
Key Features
- 15% annualized yield from option premiums on a growth stock that pays no dividend
- Monthly distributions provide consistent income stream from HIMS volatility
- Concentrated exposure to telehealth leader without diversification drag
Risks
- Full downside exposure to HIMS stock declines - a 30% drop means 30% loss plus capped upside
- Misses gains above strike price - if HIMS jumps 40%, you only capture 5-10% upside
- Single-stock concentration risk - entire fund depends on one company's fortune
Who Should Own This
Income investors who are bullish on HIMS but want cash flow now rather than waiting for capital gains. Works for those comfortable owning HIMS outright but willing to trade away moonshot potential for a 15% yield. Not for anyone who wouldn't buy HIMS stock directly.