Hey traders,
The other day on Market Masters, we got to talking about some of these leveraged ETFs.
For those not familiar, these are funds that use leverage and options overlays to promise bigger income streams.
Sounds great on paper… but in practice, they’re built to hurt traders who don’t understand the risks.
I’ll shoot straight with you: I do not trade options on leverage. Period.
These leveraged ETFs like YieldMax and similar products that are floating around? They’re built to blow people up.
I’ve been in the market nearly 40 years. I’ve seen plenty of “new products” come and go. And when I hear the words triple leverage or derivative yield, I don’t see opportunity… I see a landmine.
In fact, this kind of junk is what helped blow up Lehman Brothers and set off the financial crisis back in 2008.
Why They’re Dangerous
- Decay eats you alive. Leveraged ETFs reset daily. That means even if the underlying stock goes nowhere, the math slowly works against you.
- Volatility cuts both ways. Big moves up can look great… until the next down swing wipes you out twice as fast.
- Marketing over math. Some of these YieldMax products are packaged to look like “dividend income.” But it’s not dividend yield. It’s derivative yield — income that depends on options trades layered on top of leverage.
That’s not investing. That’s gambling with a time bomb.
What I Do Instead
I stick to bread-and-butter strategies: selling puts and calls on stocks I actually wouldn’t mind owning.
It’s steady, it’s repeatable, and it doesn’t depend on some Wall Street product designer cooking up leverage behind the curtain.
The market is already volatile enough. You don’t need to pile gasoline on top of the fire.
The Bottom Line
If you’re serious about building income from options, avoid the shiny traps.
Some clever “market expert” will always find a way to sell you a “new product” — but I promise, the oldest methods are still the best.
That’s why I won’t touch leveraged ETFs or YieldMax products.
If you’re not tuning in Wednesdays and Fridays to join me — along with Jeffry Turnmire — for market insights, trade ideas and more, I only have one question… why?
It’s completely FREE and you can register here to be alerted every time we go live.
See you soon.
Trade well,
Jack Carter
P.S. August’s hottest stocks — with a 10 year track record of success — are right here. Get them now!
