At a glance
BABO charges 1.0% a year. It has $17.8M in assets; it paid 78.5% of its price in distributions over the past 12 months, monthly. Over the past year it returned −36.8% with distributions reinvested.
The short version
YieldMax BABA Option Income Strategy ETF (BABO) is an actively managed fund that uses options on Alibaba's US-listed shares, backed by short-term US Treasury bills, to pay out large amounts of cash. Its trailing 12-month yield was about 78.5% as of October 27, 2026. The trade-off: it keeps only part of Alibaba's gains but absorbs its declines, it charges 1.00% a year, and payouts can include return of your own capital.
Price history
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BABO -36.8% over the year to Oct 27, 2026, total return with distributions reinvested.
How it has behaved
| YTD | 1 yr | 3 yr | 5 yr | 10 yr | Since start | |
|---|---|---|---|---|---|---|
| BABO price data to Oct 27, 2026 | -28.6% | -36.8% | — | — | — | +2.3% |
- Over the year to Oct 27, 2026, BABO returned -36.8%.
- Its worst full calendar year was 2025 (+47.6%); its best was 2025 (+47.6%).
- The deepest fall in its price history was 42.2% (Oct 2, 2025 to Jun 26, 2026), not yet recovered.
Show as a table
| Year | Price data |
|---|---|
| 2026 (to date) | -28.6% |
| 2025 | +47.6% |
| 2008 financial crisis stocks fell Oct 9, 2007 – Mar 9, 2009 | Before this security existed |
|---|---|
| 2020 COVID crash stocks fell Feb 19, 2020 – Mar 23, 2020 | Before this security existed |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Before this security existed |
Dividends and income
Show as a table
| Year | Per share | Change |
|---|---|---|
| 2026 (to date) | $3.7100 | |
| 2025 | $11.3300 |
What's inside
As of Jul 31, 2026, the fund held 4 securities; the ten largest made up 105.05% of assets.
| Holding | Weight | |
|---|---|---|
| TREASURY BILL Bonds and notes | 42.54% | |
| TREASURY BILL Bonds and notes | 24.92% | |
| TREASURY BILL Bonds and notes | 20.72% | |
| TREASURY BILL Bonds and notes | 16.88% |
By country
United States 105.05%By issuer
US Treasury 105.05%The bonds mature in 0.2 years on average (weighted by size), with an average coupon of 0%.
Source: N-PORT holdings report as of Jul 31, 2026. Cash, money-market funds and derivatives are shown separately from the securities list.What changed recently
- Over the three months to Jul 31, 2026, investors added a net $3.1M (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: -4.86%, -19.07%, +21.26%.
How it works
BABO doesn't follow an index. Its adviser, Tidal Investments LLC, actively runs an options strategy on one stock: the American depositary receipt (ADR) of Alibaba Group Holding Limited. An ADR is a US-traded certificate representing a foreign company's shares. The fund owns no Alibaba shares, so it gets no dividends. Instead, it purchases call options (rights to acquire shares at a set price, called the strike price) and writes put options, with one- to six-month terms, to mirror about 100% of Alibaba's price moves.
For income, it writes call options, usually expiring within a month, with strikes about 0% to 15% above Alibaba's share price. Writing a call means collecting an upfront payment, called a premium, in exchange for giving up gains above the strike. That limits the fund's upside, while Alibaba's declines pass through, softened only by premiums. If the adviser expects a short-term rally, it may also purchase higher-strike calls, creating a call spread, to keep more upside. It takes no defensive positions in bad markets.
Short-term Treasury bills back the options and earn interest. As of July 31, 2026, four T-bills totaled about 105% of the fund's $17.8 million in net assets. They averaged about 0.2 years to maturity, so interest-rate moves barely affect them. Ten Alibaba option positions had a net value of about −8.7% of assets.
What it really costs
- BABO charges 1% a year.
Structure and tax notes
- Generates much of its income from selling options (directly or through notes). That income is usually taxed as ordinary income rather than as qualified dividends, and the strategy gives up some upside in strong markets.
- Bond prices move opposite to interest rates; the longer the maturities it holds, the more its price reacts to rate changes.
In a retirement portfolio
It relies on options tied to a single stock, Alibaba, and fell about 42% from October 2025 to June 2026 without recovering by October 27, 2026, so it carries far more risk than a core holding.
BABO could add a large cash stream: its trailing 12-month yield was about 78.5% ($5.08 a share) as of October 27, 2026, and its prospectus says it aims to pay weekly. But a portion, sometimes significant, can be return of capital (your own money handed back). Option income is usually taxed as ordinary income, and the fund's one-year return to that date was −36.8%. It costs 1.00% a year.
Because it launched in August 2024, it has no record in the 2008, 2020 or 2022 downturns. Its only full calendar year, 2025, gained 47.6%. It then fell about 42% from October 2, 2025, to June 26, 2026, and hadn't recovered by October 27, 2026. Anyone drawing on it during that slide would have been cashing out shares at much lower prices. Past results don't predict future ones, and any plan needs to consider the whole portfolio, not one fund.
Who it may suit — and who should look elsewhere
May suit
- Investors seeking very large, weekly cash payouts who accept that part of each payout may be return of capital rather than earnings.
- Investors who like Alibaba's prospects and are willing to give up part of any rally in exchange for option premium income.
- Investors using a tax-advantaged account such as an IRA, where option income's usual taxation as ordinary income matters less.
Look elsewhere if
- Retirees who need steady principal: the fund fell about 42% from October 2025 to June 2026 and hadn't recovered by October 27, 2026.
- Investors wanting diversification: the whole strategy rests on one stock, Alibaba, and fund holders receive none of Alibaba's dividends.
- Cost-conscious investors: its 1.00% yearly expense ratio excludes the trading costs of its frequent option trades, which also reduce returns.
Close alternatives
Matched by bond funds with the closest average maturity and issuer mix (N-PORT).
No close alternatives found.
Questions investors ask
Why is BABO's dividend yield so high?
Because it pays out premiums collected from writing call options on Alibaba, plus interest on Treasury bills. BABO's trailing 12-month yield was about 78.5% as of October 27, 2026, from $5.08 a share in distributions. The fund receives no Alibaba dividends. Its prospectus warns that a portion of payouts, sometimes significant, may be return of capital, your own money handed back, so the yield doesn't necessarily reflect income earned. The fund's one-year return to that date was −36.8%.
Does BABO pay weekly or monthly?
Weekly is the goal. BABO's prospectus, filed February 27, 2026, says the fund seeks to make weekly cash distributions. Over the 12 months to October 27, 2026, it paid $5.08 per share. The payouts come mostly from option premiums, which vary with how sharply Alibaba's price moves, so amounts can change from one payment to the next. Part of any payment may count as return of capital rather than income, which affects how it is taxed.
Is BABO the same as owning Alibaba stock?
No. BABO never owns Alibaba shares. It uses options to mirror about 100% of the price moves of Alibaba's US-traded ADR, then writes call options that limit how much of any rally it keeps. Declines pass through, softened only by option premiums. Fund holders get no Alibaba dividends and pay a 1.00% annual expense ratio, but they receive large cash distributions. Holding the ADR directly keeps all of the upside and any dividends, with no fund fee.
Is BABO good for retirement income?
It's a high-risk way to seek income. BABO's trailing 12-month yield was about 78.5% as of October 27, 2026, but its one-year return to that date was −36.8%. It fell about 42% from October 2, 2025, to June 26, 2026, and had not recovered by October 27, 2026. Part of its payouts may be return of capital, and option income is usually taxed as ordinary income. Because it depends on a single stock, it may suit only a small, higher-risk slice of a retirement portfolio.
What is BABO's expense ratio?
BABO's expense ratio, the yearly cost taken from fund assets, is 1.00%, according to its prospectus filed February 27, 2026. That is a 0.99% management fee plus 0.01% in acquired fund fees, the indirect cost of other funds it holds. The prospectus's standard example assumes a $10,000 investment and 5% yearly returns. It puts costs at $102 after one year, $552 after five years and $1,225 after 10 years. Trading costs aren't included in these figures. Portfolio turnover was 59% in the fiscal year ended October 31, 2025.