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Strategies & Market Trends : ajtj's Post-Lobotomy Market Charts and Thoughts -- Ignore unavailable to you. Want to Upgrade?

To: edward miller who wrote (70400)	9/27/2022 6:54:24 PM
From: Qone0	3 Recommendations Recommended By ajtj99 catou1 edward miller Read Replies (2) \| Respond to of 97603

I tracked QYLD for a couple of months. I couldn't figure out how the dividend was so low. They must be selling way out of the money. So they never get called. I think one could easily do twice the dividend by buying QQQ and selling the calls yourself closer to the money. And losing the stock once in a while.

To: edward miller who wrote (70400)	9/27/2022 7:00:39 PM
From: Sun Tzu	1 Recommendation Recommended By ajtj99 Respond to of 97603

This is brilliant. A lot of people (including professional vol traders), have been pointing out that VIX has been dysfunctional. I have been thinking that the reason for that is that nobody cares about VIX anymore and people hedge via 3x short ETFs. I will do an analysis on my thread later tonight.

To: edward miller who wrote (70400)	9/28/2022 7:02:18 PM
From: Sun Tzu	1 Recommendation Recommended By ajtj99 Read Replies (1) \| Respond to of 97603

Ed, I didn't get to sleep last night, so I do not have the brain power to give you detailed math on your proposal. But here's the rough sketch. For every 100k, you can put 75% on QYLD and 25% on SQQQ. So long as the market keeps going down, your capital is protected and you will collect net ~8% yield. You run into trouble once the market starts going up b/c QYLD has no upside participation and your SQQQ will go down in value. My back of envelope calculation says that once the market goes up more than 2%, you will begin to lose. You can improve this by selling OTM calls on SQQQ or OTM puts on QQQ (they amount to the same thing, but you'll have some flexibility on depending on price and liquidity). So the structure goes like this: Allocate 75% to QYLD, 25% to SQQQ, and sell 6+% out of money calls on SQQQ. This improves your collected yield and should preserve your capital for upto ~3% market rise. It should not be too bad upto ~5% monthly gain. Again, I have not done the detailed math, so it's for you to validate.