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Or you could lose nearly everything if it goes sour, I think it’s important to point that out. That’s basically equivalent to betting on options (but wrapped u
by jleahy 4y ago
Or you could lose nearly everything if it goes sour, I think it’s important to point that out.
That’s basically equivalent to betting on options (but wrapped up in a way that looks simple). Always remember XIV.
- prottog 4y ago3x leveraged ETFs could indeed get wiped out if the market crashes, but XIV and TQQQ will behave differently, since the former holds actual underlying stock of the Nasdaq 100 Index components plus some derivative sauce for triple the leverage, whereas the latter literally only held short positions in VIX futures. And we all know that short positions have unlimited loss potential ;-) I'd say DCAing into TQQQ is not equivalent to "betting on options" in terms of risk. Obviously "options" is a general term and you can in fact construct options positions to be more or less the same as holding the underlying stock, but when you say "betting" I think it implies a high chance of unrecoverable loss that typically comes from expiring options.