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re: Options Trading Thread
Posted on 5/14/24 at 11:02 am to Jag_Warrior
Posted on 5/14/24 at 11:02 am to Jag_Warrior
@ Jag or anybody else.
I have a question on the down side to this trade.
Ticker is SQQQ.
- Pays a 9% divi
- it's at a low because the market is up. It goes higher as the market drops.
- Total cost per share, $10.50
SQQQ provides (-3x) inverse exposure to a modified market-cap-weighted index of 100 of the largest non-financial firms listed on the NASDAQ.
Index-Tracked: NASDAQ 100 TR USD
My reasoning for this purchase:
- If the market drops, this goes up offsetting some loses.
- Buy low, sell high right.
- I collect the divi
- I can sell calls on it weekly. I will not make but $5-15 on that.
- The market would have to scream in order for this to have any real loss.
OR
- Purchase a PMCC for 2 years out.
- The $7 strike is $4.75
- Purchase 2
- Sell calls on it.
I lean towards the first option due to the divi. It pays out $1.04 per year on a semi annual basis.
I'm looking for push back against this investment. What am I missing with this?
I have a question on the down side to this trade.
Ticker is SQQQ.
- Pays a 9% divi
- it's at a low because the market is up. It goes higher as the market drops.
- Total cost per share, $10.50
SQQQ provides (-3x) inverse exposure to a modified market-cap-weighted index of 100 of the largest non-financial firms listed on the NASDAQ.
Index-Tracked: NASDAQ 100 TR USD
My reasoning for this purchase:
- If the market drops, this goes up offsetting some loses.
- Buy low, sell high right.
- I collect the divi
- I can sell calls on it weekly. I will not make but $5-15 on that.
- The market would have to scream in order for this to have any real loss.
OR
- Purchase a PMCC for 2 years out.
- The $7 strike is $4.75
- Purchase 2
- Sell calls on it.
I lean towards the first option due to the divi. It pays out $1.04 per year on a semi annual basis.
I'm looking for push back against this investment. What am I missing with this?
This post was edited on 5/14/24 at 11:07 am
3
Posted on 5/14/24 at 11:26 am to BCreed1
quote:
Ticker is SQQQ.
- Pays a 9% divi
- it's at a low because the market is up. It goes higher as the market drops.
- Total cost per share, $10.50
You need to learn about contango. Google it.
Posted on 5/15/24 at 8:46 am to BCreed1
Bumping for Jag and Friends
Posted on 5/15/24 at 7:07 pm to BCreed1
quote:
I lean towards the first option due to the divi. It pays out $1.04 per year on a semi annual basis.
That’s not how SQQQ works. You should look into the “dividend” before going that route.
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