Stock of the Week

06 Nov 2024 - Investing

Welcome, this is the first of many Stock of the Week posts. In such posts, I will discuss a security (stock or ETF) that I am currently buying or selling, and will explain my rationale. These are trades I am personally making, so you will either make money with me or lose money with me by entering these trades (ideally the former). Financial Disclaimer

Stock of the Week

The first Stock of the Week is an ETF with the ticker symbol $FIAT. The ETF ticker symbol $FIAT represents the YieldMax Short COIN Option Income Strategy ETF. This ETF is unique in that it provides exposure to inverse movements of Coinbase (COIN) stock. Its strategy uses a synthetic covered put approach, which essentially generates income from options and provides limited downside exposure if the stock decreases in value. As of November 6, 2024 at 2:12 pm EST, the ETF is down over %28. This is due to the euphoria of Donald Trump’s 2024 election win, driving up the share price of $COIN over %30 at the time of writing.

I will be buying 250 shares of $FIAT today for a total cost basis of a little under $3000. As the euphoria of the elction comes down, I predict the price of bitcoin will fall in the short term, bringing down the price of $COIN back to normal numbers. This will drive the price of $FIAT up and we should be able to collect some nice capital gains. $FIAT has a current dividend yield of 107.17% according to Nasdaq.com, and pays monthly. The previous monthly payment was $1.4513 per share. The Ex-Dividend date this month is Thursday November 14, with Payment date being the next day, Friday November 15. By buying today at a low, we can expect both capital gains in the short term and a dividend later this month. We can then decide after the dividend Payment date to continue to hold $FIAT for passive dividend income or sell to realize our capital gains.