LD Lossdog Research
symbol

TQQQ

3 matching records.

Trade idea

TQQQ volatility trading

Trading volatility through short puts and calls in TQQQ can be more profitable than in QQQ due to higher liquidity in TQQQ. However, the options in TQQQ are less liquid, which may affect the edge and risk profile. The underlying stock and options markets are influenced by the same models, but liquidity differences can impact trade execution and edge. The strategy is suitable for short-term trading, but traders should be cautious about the liquidity of options and the potential for wider spreads.

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Strategyvolatility trading
AssetETF
Time horizonshort-term (weeks to months)
Entry / triggerwhen the underlying stock is actively traded and options are less liquid
Invalidation / stopif the underlying stock or options show significant liquidity issues or market volatility beyond expected levels
SpeakerMitch
Structure / legs
  • short puts
  • short calls
Risks
  • liquidity risk in options
  • market volatility
  • execution risk due to lower liquidity in options
shortETFshortTQQQVolatility
high confidenceVerify in video at 32:50 ↗
Q&A

Is it more profitable to trade by selling volatility with short puts and short calls in a leveraged bull ETF like TQQQ rather than QQQ?

It can be more profitable to trade by selling volatility with short puts and short calls in TQQQ due to higher liquidity in the underlying stock. However, the options in TQQQ are less liquid, which may affect the edge and risk profile. The underlying stock and options markets are influenced by the same models, but liquidity differences can impact trade execution and edge.

View full notes
Actionable takeawayConsider trading in TQQQ for higher liquidity in the underlying stock, but be cautious about the liquidity of options and the potential for wider spreads.
QQQTQQQETFsOptionsVolatility
high confidenceVerify in video at 32:50 ↗
Q&A

What would be the most liquid underlyings to use?

Leveraged ETFs like SQQQ or TQQQ are mentioned as having high volume and liquidity.

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Actionable takeawayLeveraged ETFs like SQQQ or TQQQ are considered liquid underlyings for trading.
TQQQliquidity
high confidenceVerify in video at 19:20 ↗