What is the Best Day to Buy ULTY?

Data shows buying on one specific day gives you the edge. There's also two days to avoid if the want to secure an optimal price.

With ULTY 0.00%↑ eclipsing $2 billion in AUM last week, it’s clear the fund’s popularity is at an all-time high. Many new investors are flocking in to take advantage of its high weekly payouts while current holders are strategizing on when to buy more. Two of the most frequently asked questions on Reddit are:

1. What is the best day to buy ULTY?

2. Why doesn’t ULTY drop to the expected price on the ex-div date?

Let’s start with Question #1. As with most dividend-paying stocks, the ex-dividend date often presents a chance to buy shares at a relatively lower price. That’s because it’s the day when the upcoming dividend (distribution) is reflected in the share price — typically dropping by the amount of the dividend before accounting for other potential factors.

That said, there’s a tradeoff to keep in mind: you need to own the stock before the ex-dividend date to qualify for the payout. So, if you buy shares on the ex-dividend date, you won’t receive the current week’s distribution. You’ll need to wait for the next cycle.

For ULTY, this timing is no different. The ex-dividend date is Thursday, which means you must own shares by market close on Wednesday to be eligible for that week’s payout.

ULTY averages a -1.3% daily return on Thursdays, which provides a nice discount for potential buyers compared to other days. Based on the average share price over the past 10 weeks, this translates to a drop of roughly 8 cents.

What’s also worth highlighting are the days to avoid if you're aiming for an “optimal” entry price. The ETF tends to perform strongest on Mondays and Wednesdays, averaging 0.6%+ daily returns.

That said, the term optimal depends on your investment strategy. ULTY is currently trading within a defined price channel, creating an environment where multiple buying strategies can be effectively applied.

What's the best price to buy ULTY at?

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Going one-level deeper

Question #2 is often asked by ULTY investors who have noticed an odd trend: Why doesn’t ULTY drop to the expected price on the ex-dividend date?

The simple answer: sometimes it does, sometimes it comes close — but getting filled at that lower price isn’t always possible unless you trade pre-market.

I crunched the numbers on ex-div days to dig into things a little more. Over the past 11 weeks, the price has dropped to the expected ex-div adjusted value only 6 times by the start of the regular trading session — and in 3 of those cases, the drop only occurred during pre-market hours before rebounding by Thursday’s open.

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So what gives? Ultimately, the underlying basket of stocks has a meaningful impact on ULTY’s daily performance — after all, they make up over 90% of the fund’s weight.

Call it a coincidence or just a byproduct of high-IV stocks in a current bull market, but since mid-June, the underlying basket has tended to yield positive daily returns on ULTY’s distribution days, which helps offset the expected drop from the weekly payout.

Another factor is the daily options trading YieldMax performs and the premium they gain from selling covered calls.

A bonus chart

To look at it through a status-quo lens: if we assume that the only factor affecting the share price on the ex-dividend date is the distribution payout, then over the past 11 weeks, only three ex-div days saw ULTY’s actual daily performance exceed the expected amount. On most weeks, the ex-div date decline was less than expected.