ProShares UltraPro Short QQQ
Bears come out to play Once of every 15 years, usually for less than a year then go back to hibernate, are you going to adjust your tin foil hats? Let them eat your watermelons and bananas while you eat red crayons. I am using my plans to Tendie Town!
People who are shitting on folks who made BETS in Wall Street BETS, while unironically giving investing advice like "don't bet more than you can afford to lose", are bigger contributors to this sub's culture change than anyone else. CMV.
Okay so my regard thoughts on your intentions as somebody who occasionally trades SQQQ. The rate of decay I believe (could be wrong) around 4-5% a month. So if you are planning on holding something to keep in mind. The economy eating shit is a very likely outcome over the next year. But that doesn't mean that the market will eat shit for any specific period of time. We could just as easily see a bit of a bullish run the next couple weeks until the FOMC and then a sell off. I don't know how experienced you are with trading or trading with this specific amount of money. But with these leveraged ETFs it can mess with you if they get to doing bad because they can drop fast. So make sure you are giving strong consideration to risk tolerance. Just an example in the last month QQQ is up about 10% or so. Which means that over that same period if you had held SQQQ you could be down 30% not even counting the decay. Two things to consider. Rather than thinking about the odds of the economy eating shit think about the odds that the market stays green over the next month or so. I'm not the best at this so take my regard opinion with a grain of salt but I'm seeing what looks like the 200 SMA and another resistance both 5-10% above where QQQ is at now. Will it test those before dropping? The other thing is why go all in at once. Look at more of a DCA kind of approach? My two cents and probably worth about as much.
Triple leveraged ETF’s are really meant for day trading or short term trading. You should never bag hold if your trade did not go to plan, you should accept your loss and get into a better trade. As for the puts, if SQQQ is not working, puts won’t either.
how fast you get poor depends on how aggressively the market pumps after you buy SQQQ. Hopefully it's over fast so you don't notice, but I'd say at least a few months to cut your investment in half. godspeed to you - I think it's a great play
I'm sorry to hear that you're not doing well with your SQQQ position. I would recommend selling your position and taking the loss, rather than holding on in hopes of a rebound. ^^[**Discord**](http://discord.gg/wsbverse) ^^[BanBets](https://www.reddit.com/r/wallstreetbets/wiki/banbets/) ^^VoteBot ^^[FAQ](https://www.reddit.com/r/wallstreetbets/wiki/votebot/) ^^[Leaderboard](https://www.reddit.com/r/wallstreetbets/wiki/leaderboard/) ^^- ^^[**Keep_VM_Alive**](https://www.patreon.com/visualmod)
I bought the PSQ 5 minutes before close today (also sold some covered calls in the afternoon). I might be early. May switch to the SQQQ sometime in the new year if this thing gets more manic. Powell basically said that rate hikes will be slowing but going higher for longer. Today's reaction is expected but overblown. Yield curve inversion says that we are either in or headed for recession.
SQQQ on a 15 year chart shows an **all-time high of $524,736** (around July 2010) and an **all-time low of $28.15** on December 27, 2021. 3x-leveraged, *inverse* ETFS decay like a mother fucker. TQQQ more or less trades proportional to QQQ, the overnight slippage is where some slippage may happen, but way less than the inverse funds
Exactly this. I use SPXU and SQQQ to hedge my SPY and QQQ positions. The "10% decay per month" stuff u/awesomedan24 is referencing I've seen come from some fund managers and advisors and sites that reference "back of the envelope" type calculations that don't reflect the actual behavior of the funds but rather some "max leverage/worst case scenario over a long time" type situations. I mean, yeah... if you hold SQQQ indefinitely, you're gonna lose money. If you hold it during a long term downtrend against a long position, though, you'll be fine. When I started using my strategy earlier this year, what I found is that the formula for these ETFs is that they work basically on a 1.1x \* leverage multiple over short periods of time in both directions, more or less. Basically, the effect of the leverage (with some very minor variance on a day to day basis because of the reset) amplifies the directional bias, and when you're in the correct direction the gains are slightly higher per dollar compared to non-leveraged, and accelerate in the same way on the wrong direction, at around 3.3x I did long-term TQQQ holding calcs once and IIRC the return was around 2.6x rather than 3x (just buying 3 times the number of QQQ shares) and that matches the probability math around leverage you're talking about. I also think the idea that these decay so much comes in part from the amplification of losses from movement, which isn't reset decay. Basically, at 3.3x amplification compared to the index, buying TQQQ on a decent decline day against the same capital for QQQ results in 3.3x the decline per dollar, which if you have 3x the capital in it (equal position) suddenly becomes... 10%. The secret to hedging with this is that you use 1/3rd the capital for the hedged short ETF and keep in mind the excess capital impact when people are swinging longs on a bear run, like TQQQ. It's key to cut the capital exposure to something people are comfortable with in their positioning and it's easy for people to overallocate to leverage.
As the other reply noted, you are still trading TQQQ or SQQQ shares for a $/share value. The 3x doesn't come into your gain/loss with respect to your counterparty on those share trades. The rest is just how leveraged funds work and how the value of the shares of the levered fund relate to the underlying index. Briefly, the fund trades futures and swaps and whoever the counterparty is to those trades either gains when the fund loses, or loses when the funds gain.
When you make money on a leveraged derivative-based ETF like TQQQ or SQQQ, who is losing money? So for instance when trading plain shares, it's pretty easy to understand where profit is coming from. I.e. if Bob sells 10 shares of AAPL to Janett for $140 each, Bob gets $1400 from Janett. But where is the profit coming from for leveraged ETFs? I.e. if I gain 3x the return of the S&P, who is that money coming from?
I tested all indicators myself. They are all garbage. All of them. Your best bet is another source aka stock, commodity or etf to give you signals. I looked at TQQQ SQQQ the last weeks myself = hint try the TLT etf. Good luck.
I don’t trade or follow SPY. The only indexes I track, not invest in, are .DJI, .NDX, and to get a hint at what kind of a day I’m looking at, .VIX. I watch the TQQQ & SQQQ day range next to each other to see the swapping back and forth bearing in mind that one is a +3 NASDAQ 100 (sans financials) fund and the latter is -3. My opinion? The pain is not over and an inglorious SPY return to 380-385 is coming.
SQQQ is too negatively correlated. You need something that will store value when you rebalance like cash or t-bils. Here’s 2x QQQ rebalanced annually with cash 50/50. Even during dot com and GFC it beats the S&P. https://imgur.com/a/0Nqb6vE longer duration treasuries backtest with even greater return than cash but will get hit hard by interest rates as we’ve seen recently.
I dont use any algorithms, but do trade LETFs against each other.. TQQQ/SQQQ, BOIL/KOLD as examples. nothing is ever considered a long term hold. I also typically hold a 25/75% balance to minimize spikes and provide a bit of a trading buffer, and move that percentage according to the trends Went 100% on KOLD when gas hit $10, and rode it down, and was working BOIL in again, but it (90% KOLD last week... This appears to be similar to your concept of not taking the legs down all the way, no?