NYYY and TYYY: A New Spin on Covered Calls for NVDA and Tesla Investors

Rethinking the Covered Call Playbook

Most covered call strategies overwrite a large portion—or even all—of a portfolio’s upside exposure.

That can work well in flat or moderately bullish markets, but it can also create frustration when stocks rally sharply and investors miss much of the move.

NYYY and TYYY aim to solve for that by taking a lighter-touch approach.

 Each day, the ETFs sell call options on only a small portion of portfolio exposure, targeting an initial overwrite of roughly 10% (with a maximum of 25%) while maintaining substantial participation in the underlying stocks.

Rather than resetting positions monthly or weekly, the strategy refreshes daily. This allows the funds to continuously collect option premiums while adapting more dynamically to changing market conditions and volatility levels.

The structure is designed to preserve approximately 90% upside participation intraday while maintaining full overnight and weekend equity exposure—an important distinction for stocks like NVIDIA and Tesla, where significant price moves can occur outside normal market hours.

The result is a strategy that sits somewhere between pure equity ownership and traditional covered call income investing.

Turning Volatility Into Weekly Income

High-volatility stocks naturally command richer option premiums, which creates an opportunity for income-oriented strategies. NYYY and TYYY seek to monetize that implied volatility through daily option writing while distributing income on a weekly basis.

For investors, the appeal may extend beyond simply generating yield. The collected premiums can also provide a modest downside buffer during periods of market weakness, helping smooth returns in particularly volatile environments.

That positioning could make the ETFs attractive for a variety of portfolio use cases: enhancing income on existing equity allocations, supplementing yield in a lower-rate environment, or serving as a more growth-oriented alternative to traditional covered call funds.

Importantly, the funds are not trying to eliminate volatility altogether. Exposure to stocks like NVIDIA and Tesla inherently carries significant risk. Instead, the goal is to create a structure that allows investors to remain exposed to the long-term growth potential of these companies while systematically harvesting income from the volatility surrounding them.

Bringing Institutional-Style Options Strategies Into ETFs

According to Johnny Wu, Co-founder and CEO of xETFs, the firm sees these strategies as difficult for most individual investors to replicate on their own.

“These are not strategies that individual investors can easily ‘DIY,’ and we are thrilled to bring our team’s collective decades of experience in derivatives and sophisticated options trading approaches to the highly liquid ETF wrapper for the first time.”

That idea reflects a broader trend in the ETF market, where increasingly sophisticated derivatives-based strategies are being packaged into accessible wrappers for retail investors and advisors alike.

About xETFs

xETFs focuses on building institutional-style ETF strategies designed to be accessible and transparent for individual investors. The firm emphasizes clarity, practical strategy design, and simplified communication around more advanced investment approaches.

With the launch of NYYY and TYYY, xETFs is entering the increasingly competitive options-income ETF space with a structure aimed at balancing income generation and equity participation—particularly in some of the market’s most closely watched growth stocks.

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.