Question 1:
We all know that TQQQ is three times as long as QQQ, so buying one TQQQ share is equivalent to buying how many QQQ shares? In other words, after buying x shares tqqq, what is the ratio of x and y to achieve the same profit/loss?
If your answer is 3, then you've made a mistake. A clear understanding of the leverage ratio is very important for leveraged ETFs.
The current price of qqq is 426, and tqqq is 56; the ratio of the two rates of change is three times, that is, qqq increased by 1% and tqqq increased by 3%. The actual change in stock price is that qqq rose 4.26, and tqqq rose 1.68. The calculation shows that 4.26/1.68 = 2.5, which means that the increase in 1 share of qqq requires buying 2.5 shares of tqqq to eat.
Question 2:
What is the utilization rate of funds?
As can be seen from the above question, in the case where the profit is the same, the ratio of QQQ and TQQ shares is 1:2.5, and the amount required to invest is 426:140 = 3. Therefore, everyone should be aware that triple leverage is based on capital rather than number of shares. At this point, the results are very intuitive. Next, let's discuss the options issue.
The current monthly option call ATM price is qqq: tqqq = 9.2:3.4 = 2.7. The result we got in question 1 is 2.5, which is very close. However, there is also a share leverage ratio for options.
How to choose:
1...