Mid Week Post

November 21, 2024

The highest ROI you you can earn in 5-minutes, Your investment being your time!

  • Article: Why I Trade TQQQ

Why I trade TQQQ?

The ProShares UltraPro QQQ (TQQQ) isn’t your average ETF—it’s like the Nasdaq-100 (QQQ) on steroids. It’s designed to deliver three times the daily performance of the index. Sounds exciting, right? Well, buckle up because it’s a wild ride that can make or break your day faster than you can say “fast and furious.”

 Why I love TQQQ:

1. Triple the thrill: TQQQ’s 3x leverage means if the Nasdaq-100 goes up 1%, you’re looking at a 3% gain. Of course, if it goes down, you’re taking a 3x punch to the face.

  • Perfect for the Fast: It’s built for short-term strategies. Think of it like a high-speed car—you don’t drive it for long road trips. I use it for Weekly Income Generating Options trades

  • Super Accessible: TQQQ is easy to trade, super liquid, and gives you exposure to tech giants without buying individual stocks. One ETF, all the tech vibes.

 Risks to Keep You Up at Night:

  • Whiplash Volatility: With 3x leverage, your gains are sweet, but your losses are brutal. In the 2020 COVID crash, TQQQ nosedived over 70%. Ouch.

  • Daily Reset Drama: TQQQ recalibrates daily. This means over time, the results can veer away from what you’d expect, especially in choppy markets. Math magic, but not always the fun kind.

  • It costs more: With an expense ratio of 0.84%, you’re paying more compared to regular ETFs like QQQ. But hey, nothing in life is for free.

The Options Premiums Angle:

If you’re looking at TQQQ options, here’s what you need to know:

  • Call Options: Let’s you buy the stock at a set price. I prefer to sell Calls more than buy, that’s the income part

  •  Put Options: Lets you sell stock at a set price. I like to sell more Puts than I buy, again that’s the income part. But you may buy Puts to hedge your long stock positions. But that’s a story for another day.

Factors that hike up TQQQ options premiums:

  •  Volatility Party: TQQQ is 3x leveraged, so it’s naturally more volatile. Higher volatility = higher premiums.

  •  Implied Volatility (IV): Think of this as the market’s mood predictor. A spicier mood (higher IV) means spicier premiums.

  • Time Decay: As expiration nears, the value of your option fades faster than your New Year’s resolutions. Y’all know what I’m talking about.

 Final Thoughts:

TQQQ is like a triple shot of espresso for traders—it’s bold, exhilarating, and not for the faint of heart. Whether you’re trading the ETF itself or its options, make sure you know the risks and have a plan. Because with TQQQ, the highs are high, and the lows… well, it will kick you where it hurts.

Below is a graphical representation of one last reason I like to trade TQQQ:

 

YTD gains per year

2019 130.77%

2020 100.13%

2021 91.35%

2022 (-79.79%)

2023 199.82%

2024 60.40% so far this year

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Thanks for reading,

Sanjog

Disclaimer Alert: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.

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