10d ago in Education and Materials
The Strategy´s Magic Component
This image shows the daily price chart of SQQQ, an inverse ETF that moves opposite to the NASDAQ index. The chart reveals a steady downward trend, with SQQQ consistently losing value over time, which is typical for inverse ETFs due to factors like daily rebalancing.
How to Benefit with Call Options: By selling call options on SQQQ, you can profit from its natural downward drift. Since SQQQ tends to lose value, the call options you sell are less likely to be exercised (end up "in the money"), allowing you to keep the premium received from selling the option.
This strategy takes advantage of SQQQ's built-in decline, offering a way to generate consistent income with limited market risk, as long as you manage potential spikes with proper risk measures.
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The Strategy´s Magic Component
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