3x ETF

3x ETF


I've been selling puts on TQQQ lately. Working out well. 1/3 the price, 3x the volatility. I'd rather do puts, there's a limit on your losses with a put, sky's the limit with a call.


I’ve been buying puts that are 30 days out. Until the market tanks then these will continue to drop like they always do and at 3x it’s fun. I only do 1 at a time to limit premium losses but so far I’m 2 out of 2. LOL


What delta? I was looking at 30 Delta It's a decent 3ish % a month. But didn't mind selling ATM puts So I'm looking for confirmation bias 🤤


I calculated, it is closer to 4x premium for some reason but only 3x volatility.


but if you go long on a 3x leveraged fund doesn't your investment decay if you hold it overnight?


Look at the 5 year chart.


No — volatility drag doesn’t work like that. There’s a lot of misunderstanding and bad info on leveraged ETF’s.


no it does not decay, happy to explain but thats all you need to know, it just has higher volatility and everything that comes with that though that should be obvious


Ah, gotcha. Thanks!


I sell puts on TQQQ and TNA all the time.


check out my history. you may be interested. i only do 3x etfs. https://imgur.com/s6ckwCm.png


if you got assigned wouldn't you experience decay in your shares since 3x etfs are day trading vehicles? Or do you BTC


I bought 400 shares of TNA on 8/19 for $75 a share. I have been selling calls and puts weekly. TNA is at now at $93. I don’t worry about any decay. I only sell puts when the price drops big on TQQQ.


jelly, i got in tna at like 93, been selling puts and strangles on it got in tqqq at like 100ish across my accounts so thats been nice


I've been playing TNA since the crash, I'm married to the damn ticker and can't leave her, I know one day the wheels will fall off though


If you're bullish just sell puts on TQQQ instead of messing with SQQQ.


Naked calls on a 3x inverse tech etf when tech is at all time highs? I’m generally bullish but what is your plan if tech gets spooked? What if rates go up faster/higher than expected or semiconductor issues worsen? I’m not saying the sky will fall soon but that is a significant amount of risk if something unexpected happens - and all for just a touch of premium. No thanks.


So with this type of investment it is designed to go to zero. The problem with selling naked calls is the 1 time we have a significant down move in the nasdaq. However if you did spreads you could potentially limit your losses.


> So with this type of investment it is designed to go to zero. not really true though nasdaq does tend upwards this will tends toward 0 but its not designed to go to 0 thats misleading


i figured if I keep my investment small that this could generate some cash for me to grow my account, since like you said, it would eventually go to 0


Naked calls always have a downside


Sqqq is basically a decaying asset as the market typically goes up and this is short the market. So the longer the market is in an uptrend the more this decays. Because it is rebalanced everyday you can see returns different than the market. If you saw a big drop in the market. You’d probably be better off wheeling an individual stock than an inverse leveraged etf. Selling calls on this is bullish the market so not a bad stance but there r better things to sell puts or calls on to take that position and limiting your risk. Selling a call unlimited exposure selling puts limited exposure.


This is not how decay in leveraged products works. If a market trends you experience less decay, if it experiences volatility and rubber bands you get volatility decay.


> I'm definitely bullish on the tech sector, but I don't have enough money to wheel QQQ. Then define your risk and sell QQQ spreads you fool. Please describe to the class how SQQQ works, since you have obviously read and understood the prospectus as you are willing to invest in the product correct? SQQQ is a tricky bastard. I guarantee you do not have a complete grasp on it, as you are cold-calling reddit.


I sometimes buy calls a few strikes up just to limit my risk and free up buying power. If you don't limit risk, the price will shoot up if QQQ drops a couple percent and you can't get decent premium on the put side.


The risk is that the underlying moves in a direction you don’t want it to. If underlying crashes, you lose. Frankly, if you want to gamble, go for it. If you want to invest, you need enough cash to size positions relative to the risk you take on. Maybe if you have to ask these questions, start with spreads or other trades on spy.


Others have pointed out it's probably safer to sell puts on TQQQ, but I'm guessing you may be basing your selling naked calls thought process on the fact that SQQQ decays and trends downward, which would generally be profitable when selling naked calls. The key piece not yet mentioned is market participants also know this, so naked calls on SQQQ don't pay much and are definitely still a risk. I hate the saying, but what you are trying to take advantage of is priced in.