A specialized exchange-traded fund is harvesting outsized returns from one of Wall Street's most volatile darlings, offering investors yields that dwarf traditional income investments. The YieldMax PLTR Option Income Strategy ETF is currently delivering an annualized yield of nearly 70%, capitalizing on the wild price swings that have made Palantir Technologies the standout performer of 2025.
The PLTY fund, which launched in October 2024, uses a complex options strategy to generate income from Palantir's volatility while the data analytics company trades near record highs with a market capitalization approaching $328 billion. As traditional dividend yields hover in low single digits, PLTY's monthly distributions have attracted investors seeking income in a market where Palantir stock has surged 80% in the first half of 2025.
PLTY's monthly payouts have averaged $4.20 per share, translating to annualized yields between 90% and 100% at various points this year, according to Trading News1. The fund's most recent distribution in June was $3.26 per share, contributing to a trailing twelve-month dividend yield of 58.90%2.
The fund generates these payouts through a synthetic covered call strategy, selling call options on Palantir stock without directly owning the underlying shares34. Instead, PLTY replicates Palantir's price movements through a combination of long call options and short put options, while simultaneously writing covered calls to harvest premium income4.
This approach allows the fund to participate in Palantir's upside movements while generating steady income from option premiums, though gains are capped when the stock price exceeds the strike price of the sold calls4.
Palantir's implied volatility currently sits at approximately 51%, providing fertile ground for the option-writing strategy that underpins PLTY's distributions1. The data analytics company has emerged as 2025's best-performing S&P 500 stock, with shares climbing 80% in the first half of the year following strong quarterly earnings and raised guidance2.
The stock's volatility, which saw it drop 12% after first-quarter earnings before quickly recovering, creates the price swings that generate higher option premiums for funds like PLTY2. With analysts pricing in a 10.7% swing ahead of Palantir's anticipated August 4 earnings release, the elevated volatility environment appears likely to persist3.
Palantir now ranks as the 29th most valuable company globally, having surpassed established names like Coca-Cola and IBM34.
