Roundhill’s MAGY ETF targets weekly distributions by selling covered calls on high-liquidity AI-linked stocks at a 0.99% fee.
Roundhill Investments launched MAGY, an ETF that transforms the Magnificent Seven stocks into a weekly income strategy by actively selling covered calls. The fund charges a 0.99% annual fee, significantly higher than the 0.30% fee for its sister ETF, MAGS, which holds the same underlying stocks without the options overlay.
MAGY provides daily transparency on overwrite levels, strike prices, remaining upside, and option expirations. The ETF aims to capitalize on the liquidity and volatility of stocks like NVIDIA and other AI-linked equities, which generate substantial option premiums. However, the capital required for individual covered call positions on these stocks—often trading above $100 per share—can be prohibitive for smaller investors.
By packaging the Magnificent Seven into a single ETF trading at around $65 per share, MAGY lowers the capital threshold for investors. The strategy remains complex, requiring an understanding of options mechanics despite the simplified access.