OK, I'm about 99% sure I just came up with a way to DESTROY the market...
- Thread starter SoyUnGanador
- Start date
As long as TQQQ makes some profit, you'd be okay with this. The question is whether you'd really make any money on your put buying or if would just be a big drag on your portfolio. Think about the tech crash of 2000 followed by a lost decade where stocks had no gains (and QQQ/Nasdaq took more than 10 years to fully recover and reach new all time highs).
Long underlying + long put = synthetic long call.
Same outcome.
Basic.
TBF - you are saying to go heavier on your puts, it sounds like, so not really identical. But... not enough to get excited about.
It did a number on Sam Bank-Man-FRIED! though. And he tried to destroy some markets. (He can be seen virtue signaling about veganism with a container of soy milk in the background at one point).
True, theoretically but both have to deal with exit strategies. The TQQQ is buy and hold, but when would you sell calls and buy more (purely based on time or possibly profit levels & stop losses?). The same is true for puts.
You were also massively short in late March 2020. How's the perma-shorting worked overall since 2009?Look at 1 year chart. A year ago it was $80/share. Now it's in the 20s. That would've destroyed an account lol
I'm long SQQQ here
From its debut in Feb 2010 until Nov 2021 it went from roughly $0.40 to $92. An amazing gain of 230X. I doubt the best hedge fund in history even achieved that. That's a 3.9% monthly gain for 141 consecutive months.
Those days are probably for the QQQ. If inflation persists you can probably do something similar by just buying the energy or precious metal leveraged ETFs. I think this strategy only works with indexes that don't have huge drawdowns. I bet going forward you could something like this but with sector ETFs like industrials, health care, energy, etc.
Those days are probably for the QQQ. If inflation persists you can probably do something similar by just buying the energy or precious metal leveraged ETFs. I think this strategy only works with indexes that don't have huge drawdowns. I bet going forward you could something like this but with sector ETFs like industrials, health care, energy, etc.
One thing not to forget, is the higher cost of leverage because of higher interest rates. In the past decade interest rates were zero or falling, now they are rising and they get significant. That will reduce the TQQQ returns a lot. Keep that in mind when going long on TQQQ. Also any longer consolidation even without deeper drawdowns lower the value of TQQQ much. In composition with high interest rates, I doubt we can get in this decade the same return as last decade. I also would say that a momentum strategy where you can make up to 25% per annum without leverage could be better then lower returns on QQQ with that triple leverage because of rates. So I would look around for momentum strategies with high returns and WITHOUT LEVERAGE too here as alternative to TQQQ, and then compare them again. A side effect is, that with Momentum strategies (on stocks) you do not get 80% drawdowns or anything near that level. So you do not need to include any put strategies as hedge or anything like that.