RGYY generates synthetic income by holding Rigetti Computing (RGTI) shares while selling covered calls against the position. This strategy sacrifices upside potential in RGTI beyond the strike prices to manufacture a 21%+ distribution yield from a quantum computing stock that pays no dividends.
How It Works
The fund maintains a long position in RGTI shares and systematically writes call options with strikes typically 5-15% out-of-the-money, rolling monthly. Premium collected from selling these calls gets distributed to shareholders as synthetic dividends. When RGTI rallies hard, the fund's upside gets capped at the strike price plus premium received, but sideways or declining markets generate steady income.
Key Features
- Transforms a non-dividend tech stock into a 21%+ yielding income vehicle through options
- Monthly distributions funded by call premium, not company fundamentals or earnings
- Provides RGTI exposure with built-in downside buffer from option premium collected
Risks
- Quantum computing stocks like RGTI can move 20-50% in days, leaving massive gains on the table when capped by calls
- In a RGTI crash below breakeven (stock price minus premiums), you lose like a stockholder but with complexity
- That 21% yield vanishes if option premiums compress from lower volatility or reduced retail speculation
Who Should Own This
Income investors who want quantum computing exposure but need current cash flow, or RGTI bulls willing to trade away moonshot upside for monthly income. Works as a 1-3% satellite position for yield chasers who understand they're buying capped upside RGTI, not a bond substitute. Anyone expecting to hold through a potential RGTI 10-bagger will be disappointed.