SQQQ has been trending upwards in the past 5 days as the markets are waiting for the Feds decision tomorrow on interest rates.
SQQQ is up 3% in the past 5 days. Last Friday was the worst day since August as all 3 US indexes closed down. Last Friday was also Triple Witching Day when the stock options, stock index futures and stock index options all expire on the same day. There is increased trading activity as traders close, roll out or offset their expiring positions, particularly in the final hour of trading.
SQQQ is a daily targeted inverse ETF designed for short term high risk high reward gains if the Nasdaq 100 Index struggles. This ETF is not suitable for a long term hold due to the compounding effects of time decay.
SQQQ expense ratio is 0.95% which is rather high.
However buying SQQQ is lot easier than trading options. It is also a great way to hedge my portfolio too.
SQQQ is down 66% year todate compared to $Invesco QQQ Trust(QQQ)$
which is up 40% year todate.
September is seasonally one of the worst months for the stock markets. It looks like this September is no different.
However September is a great time to bargain hunt for quality stocks to buy and hold long term. That's what Warren Buffett likes to do - Buy when there is Fear in the markets and that's how he became a billionaire!
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So SQQQ is best suited for short-term investors who have a strong bearish view on the Nasdaq 100 index,right?
Yeah, it is a popular tool for the one who are bearish on the Nasdaq 100 index.
I think SQQQ is a complex and risky investment product.