[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]  ambassador of qwan [@ambofqwan](/creator/twitter/ambofqwan) on x 2449 followers Created: 2025-07-13 04:09:12 UTC 📬 I’ve said many times that in MY situation “I’m riding these YieldMax ETFs until the wheels fall off” ~ and based on this, a great question popped up. 🧠 ✳️ “If you’re never selling your shares of a YieldMax ETF, then NAV decay is actually helpful because it reduces the cost of shares when you DRIP and buy more, right? The cost per share has no bearing on the fund’s ability to pay the distributions, right?” 💡 Love this line of thinking ~ they’re asking the right kind of questions. Here’s how I look at it: ✅ Yes — when you DRIP at a lower share price (below your cost basis), you accumulate more shares with each distribution. 💯 And in my model, share count is important. More shares = more income potential in the next cycle. BUT… ⚠️ NAV decline is only “guaranteed” on ex-div day, when the distribution physically reduces the NAV. Outside of that, NAV movement is driven by a mix of factors: option trade premiums earned, synthetic adjustments (based on the underlying movement), and implied volatility. It’s not a predictable discount ~ just a reflection of the fund doing its job in real time. ✳️ Now, to the second part ~ and honestly, major kudos, because they’re spot on: ✅ They’re absolutely right ~ the ETF’s share price has no bearing on its ability to pay distributions. 💴 Distributions are generated by earned income from weekly option premiums or taxable synthetic rolls ~ and in no way rely on new capital flows. The share price can be up, down, or sideways ~ if there’s volatility and liquidity in the options market, the fund can generate income. What actually drives distributions: •🌀 Implied volatility •⚙️ Premiums captured from active options trading •🧠 Tactical execution by the fund managers •🔄 Movement of the synthetic structure relative to the underlying stock 📉 So even if the share price dips (😊 and you get the opportunity to purchase more shares below your cost basis), that doesn’t mean the income train stopped running. 💸 The engine runs on volatility ~ not valuation. Keep these questions coming ~ iron sharpens iron, and it helps the whole community. 🤝 🔷 Ambassador of Qwan Learn | Earn | Conquer the Future #YieldMax #CoveredCallETF #IncomeInvesting #DRIPStrategy #HighYield #OptionsIncome #VolatilityMatters #SyntheticIncome #NAVDecay #FinancialLiteracy #AmbassadorOfQwan XXXXXX engagements  **Related Topics** [fund manager](/topic/fund-manager) [stocks](/topic/stocks) [Post Link](https://x.com/ambofqwan/status/1944247717317788059)
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ambassador of qwan @ambofqwan on x 2449 followers
Created: 2025-07-13 04:09:12 UTC
📬 I’ve said many times that in MY situation “I’m riding these YieldMax ETFs until the wheels fall off” ~ and based on this, a great question popped up. 🧠
✳️ “If you’re never selling your shares of a YieldMax ETF, then NAV decay is actually helpful because it reduces the cost of shares when you DRIP and buy more, right? The cost per share has no bearing on the fund’s ability to pay the distributions, right?”
💡 Love this line of thinking ~ they’re asking the right kind of questions.
Here’s how I look at it:
✅ Yes — when you DRIP at a lower share price (below your cost basis), you accumulate more shares with each distribution.
💯 And in my model, share count is important. More shares = more income potential in the next cycle.
BUT…
⚠️ NAV decline is only “guaranteed” on ex-div day, when the distribution physically reduces the NAV. Outside of that, NAV movement is driven by a mix of factors: option trade premiums earned, synthetic adjustments (based on the underlying movement), and implied volatility. It’s not a predictable discount ~ just a reflection of the fund doing its job in real time.
✳️ Now, to the second part ~ and honestly, major kudos, because they’re spot on:
✅ They’re absolutely right ~ the ETF’s share price has no bearing on its ability to pay distributions.
💴 Distributions are generated by earned income from weekly option premiums or taxable synthetic rolls ~ and in no way rely on new capital flows. The share price can be up, down, or sideways ~ if there’s volatility and liquidity in the options market, the fund can generate income.
What actually drives distributions: •🌀 Implied volatility •⚙️ Premiums captured from active options trading •🧠 Tactical execution by the fund managers •🔄 Movement of the synthetic structure relative to the underlying stock
📉 So even if the share price dips (😊 and you get the opportunity to purchase more shares below your cost basis), that doesn’t mean the income train stopped running. 💸 The engine runs on volatility ~ not valuation.
Keep these questions coming ~ iron sharpens iron, and it helps the whole community. 🤝
🔷 Ambassador of Qwan Learn | Earn | Conquer the Future
#YieldMax #CoveredCallETF #IncomeInvesting #DRIPStrategy #HighYield #OptionsIncome #VolatilityMatters #SyntheticIncome #NAVDecay #FinancialLiteracy #AmbassadorOfQwan
XXXXXX engagements
Related Topics fund manager stocks