Market starting to feel pricey again. Trying to keep my Roth levered above 1x but not much above.
TQQQ grew to about 9% of my acct and obviously did amazing.
SSO feels like the right amount of leverage at these all time highs. When everyone starts complaining about everything again I’ll go back into TQQQ.
Market starting to feel pricey again. Trying to keep my Roth levered above 1x but not much above.
TQQQ grew to about 9% of my acct and obviously did amazing.
SSO feels like the right amount of leverage at these all time highs. When everyone starts complaining about everything again I’ll go back into TQQQ.
I used to sell a lot of cash secured puts, and a few covered calls once in a while.
While I made money overall my returns in 2023 2024 2025 weren’t anywhere near as good as if I just held something like QLD or even QQQ.
Now about 60% of my acct is in QLD and about 20% in KMLM. I’m ready for more risk and much more upside.
That being said, since we have done so amazing over the last two months, I’m wondering how much higher we can go over the next 30 days. Wondering if I should start selling 30 DTE calls on QLD around strike $100?
QLD is around $90 and it would be so nice collecting that extra $1.50 a month now. I’m thinking when the market seems very high, how much can it hurt selling calls 10% out of the money every month?
I was thinking I can sell the calls on a day when everyone is excited near all time highs, roughly 30 days away, use the $$$ to buy more shares of QLD every month.
Does anyone do this?
From the perspective of making the most over the last 15 years, YOLO DCA into TQQQ or FNGU wins.
From the perspective of longer term, I’ve read articles that a touch over 2x leverage is better because 3x can and probably will drop 99% at some point.
From the perspective of what humans can actually handle once they’ve been accumulating wealth for years, probably 1.2x is the max. Most people have money in their 401k at 1x leverage, their kids stocks at 1x leverage, maybe their main acct around 1x leverage or less as well. 60/40 stocks/bonds is probably closer to reality which is closer to 0.7x leverage.
If you have the balls to buy QLD or FNGU or TQQQ with any serious money in a different acct or a sizable acct, more power to you.
Considering all your accts and houses and wealth, what is your real leverage ratio? If you have a net worth of everything of $1,000,000 and own $50,000 TQQQ your real leverage ratio is about 1.1x. (Which is still higher than 99% of people).
The Cons:
You never hear the word decay as often as in a subreddit like this. We all know LETFs decay. You lose 80% and you need 400% just to get back to even.
Investing $10,000 in something like TQQQ and watching the money go down to $2000 must be scary as hell.
Almost impossible to invest $1,000,000 in TQQQ after investing for years and watching it go down to $200,000. Very different situation.
These suck, temporarily.
The Pros:
Compounding is amazing. Up 2% and then up 2% is up more than 4%. The market is open 252 days a year and more than 126 are up, more like 135 up and 117 down on average. If QQQ is up 35% for the year, TQQQ is up way MORE than 105% for the year.
Decay isn’t as bad as feared. If QQQ is down 35%, TQQQ is never down 105%. So we lose less than 3x on the way down and we make more than 3x on the way up.
Long term, the market has ALWAYS gone up. You can lose your money on stocks and options in a variety of ways. No one has ever lost money buying (months or years ago) and holding (still holding) QQQ, QLD, TQQQ.
Fear causes us to miss out on more money than we could ever possibly lose.
Amazing how close to a 2x ratio is for QLD yearly. Same with TQQQ.
Just an idea. Just brainstorming.
I love the idea of using leverage and wish I was using it more over the last 2 years.
The biggest criticism seems to be that you can lose a whole bunch of money quickly, or even slowly.
The biggest reason to do it is to enjoy those years where you can be up 80% when SPY is up 20%.
I love QLD the best personally (2x QQQ)
Imagine Aaron and Bob
They both have $91,000 and trying to decide what to do.
Aaron buys 1000 shares of QLD at $91 and willing to take the risks of a 75% drawdown or more for the chance to make hundreds of percent over the next decade. He might take a 75% drawdown 3 times over 10 years.
Bob both can’t handle a 75% drawdown and doesn’t want to have to make 300% to fight his way back. So he buys 10 calls on QLD, Jan 2027 strike 70 is $27 right now. That’s $27,000. He puts the rest of his money, $64,000 in a safe fund like SGOV getting 3%.
Worst case scenario, AARON has $20,000 of QLD and miserable. Bob still has $66,000 in SGOV, ready to buy 10 more calls much cheaper. Maybe he decides to buy 15 of them now since he’s doing so well, relatively.
Best case scenario, their accts are both up to $150,000. Aaron does slightly better due to Bob having to pay extrinsic value, but Bob is still thrilled.
Thoughts 💭??
I think spending roughly $6 in extrinsic value more than outweighs the risk of ruin. The fact that we can lose 70% 80% 90% is people’s biggest criticism of leveraged ETFs.
Most years are up 20% or more (QQQ)
A quarter of the time we have a down year.
Decay is real but looking at any long term chart and we see the risk isn’t as bad as people make it seem. (We all understand the math). Most years are up over 20%, not flat, going back to the Great Depression.
QLD went from $46 to $17 in 2022. 2022 would still suck being down 28% at the low point, but at least you wouldn’t be down 66% and need a 200% return to come back
Gemini was assuming:
that Reddit has 25% growth over the next five years instead of 70% growth, GAAP earnings
that Reddit dilute shares at 3% per year due to SBC
that the EV / GAAP earnings / growth ratio remains around 2.0 in 2031
I think we are secretly hoping that Reddit will grow faster than 25% per year.
It might not be this year or next year, but RDDT will get to $1000. Think of how many stocks that you missed out on five years ago that you wish you could go back in time and buy right now.
Revenue growth , earning growth, balance sheet, all phenomenal. Plus, they are selling our posts to train OpenAI and Gemini, who will pay more and more over the years.
EDIT: roughly 8 year target, compounding around 26%
Year 1 , $195
Year 2, $250
Year 3, $320 etc…
seems very doable
Wow this one moves!
We see a lot of backtests over the wonderful last 17 years and it often ends in tens of millions. Has anyone actually made that much or are most of us in the 5 figures and hoping the next couple years go well stage?.
Frustrated that I’m not keeping pace with QQQ over the last three or four years. Decided to sell almost all of my individual stocks. Now my taxable account looks something like this.
Rough numbers, I haven’t done the exact math
47% QLD
47% BINC
5% SVXY since we are in contango
More than one percent invested in a Reddit call spread for January 2027, 100/250, out of everything I decided to keep this one
I am also short, some puts that I don’t want to close until they’re worth like $.15 each
But that’s it, the plan is to buy more QLD and possibly buy some TQQQ on a big drop, that’s why I’m keeping so much money in BINC because it doesn’t move much at all and pays 5%.
Selling calls and watching everyone else make money hurts much worse than selling puts and watching the stock drop.
Plus calls can be much harder to roll because there is no fear value.
I see a lot of people that are being sloppy with this the last two months.
In general, if you own 100 shares of a stock, pick a strike price that you would be absolutely thrilled to sell your shares at. Other than that do not sell covered calls.
I’m just telling you from experience, watching Meta in 2023 was rough.