To The Moon

🌟🌟🌟The current geopolitical conflicts in the Middle East and the higher for longer interest rates by the Feds have turned the US market sentiments to Bearish.

$Cboe Volatility Index(VIX)$ is up 15% in the past 5 days.    VIX is also known as the Fear Index and is a popular measure of the stock market's expectations of volatility based on the S&P500 Index options.

$Nasdaq100 Bear 3X ETF(SQQQ)$  provides a negative 3 times (-3x) inverse exposure to a modified market cap weighted index of Nasdaq100.

To provide this exposure, SQQQ uses swaps on the popular $Invesco QQQ Trust(QQQ)$ , swaps on the index itself and futures.

SQQQ is designed to provide this inverse  exposure on a daily basis.  It is not suitable for long term holds due to the effects of compounding.

All major US indexes finished lower on Wednesday as the prospect of higher for longer interest rates worried investors.  The S&P500 and Nasdaq 100 each finished with their 4th straight session of losses since January 4.

SQQQ expense ratio is 0.95%.  Assets Under Management is USD 3.11 billion.  The current distribution yield is 9.5% paid every 6 months. 

Performance wise SQQQ is up 3.6% today and in the past 5 days it has risen by 10%.  In contrast QQQ is down 1.2% and in the past 5 days it has dropped by 3.2%.  However QQQ is up 5.7% year todate and has jumped 33.5% in 2023.  SQQQ is down by 16% and in 2023 it has dropped by 60%.  That is why it is not suitable to hold SQQQ long term. 

I bought SQQQ today as a short term strategy and to  hedge against the current downward trend in the markets.  Volatility is the price we pay for long term outsized gains in the markets.  While I am short term Bearish on the markets, I am still Bullish long term. 

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