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Message
re: Options Trading Thread
Posted on 5/16/24 at 10:09 am to LSUtoOmaha
Posted on 5/16/24 at 10:09 am to LSUtoOmaha
quote:
Selling covered calls on SQQ is not going to make up for the brutal decay factor inherent in a 3x inverse leveraged ETF.
Not a product or strategy that I’ve ever looked into - mainly because of contango and the risk inherent in being long leveraged products.
So just a question here: have any of you looked at call credit spreads (being defined risk) or calendar strategies, rather than anything that involves being long the underlying?
1
Posted on 5/16/24 at 12:36 pm to Jag_Warrior
To keep digging at this downside vs upside, here is an article I would like for you guys to counter when/if you have the time.
LINK
Leveraged ETFs: The Data Says We're Missing Out
- Long-term investors can expect to outperform broad market indexes when using leveraged ETFs so long as the overall leverage level of their portfolio is modest and they rebalance daily
- Hedge funds and trading firms can exploit specific nuances of these products that may not be correctly priced by the market
But from my experience on holding TQQQ, I don't see the horror to holding it long term. I purchased at the time the market was rebound and held the shares into the 50s while selling calls. My returns were great. In Jan 2023 it was $17 while SQQQ at $52. It's now reversed. SQQQ is at $10 while TQQQ is at $63.
I liquidated enough of my TQQQ to make my investment back plus profit. I do believe that markets go up, then they go down. Unforeseen events happen all the time.
My thoughts are that we are at an all time high with the market breaking 40K today. (which is why I am considering this) At some point it will drop. Not wishing for it, it may be 1 or 2 years, but it will pull back.
LINK
Leveraged ETFs: The Data Says We're Missing Out
- Long-term investors can expect to outperform broad market indexes when using leveraged ETFs so long as the overall leverage level of their portfolio is modest and they rebalance daily
- Hedge funds and trading firms can exploit specific nuances of these products that may not be correctly priced by the market
But from my experience on holding TQQQ, I don't see the horror to holding it long term. I purchased at the time the market was rebound and held the shares into the 50s while selling calls. My returns were great. In Jan 2023 it was $17 while SQQQ at $52. It's now reversed. SQQQ is at $10 while TQQQ is at $63.
I liquidated enough of my TQQQ to make my investment back plus profit. I do believe that markets go up, then they go down. Unforeseen events happen all the time.
My thoughts are that we are at an all time high with the market breaking 40K today. (which is why I am considering this) At some point it will drop. Not wishing for it, it may be 1 or 2 years, but it will pull back.
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