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Going short TQQQ instead of going long SQQQ

Hi all,

When trading, TQQQ/SQQQ, I’ve noticed that many times if I short TQQQ instead of going long SQQQ, at least for the short holding times of SQQQ, shorting TQQQ may be better. The difference is sometimes small, but sometimes bigger, that it might be worth it to short TQQQ instead. Besides the risk of potentially infinite theoretical losses, is there a reason not to short TQQQ intead of going long SQQQ?

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Yes, the risk of potentially infinite losses.
You can lose your house, cars, motorcycle,
boat, snowplow and wife.

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The theoretical losses are the big thing. However are you taking into account the cost of the margin loan? My understanding is that C2 doesn’t take that into account.

Yeah there’s that too, probably easier just to use SQQQ (I suspect you’d still get slightly better performance though with shorting TQQQ for short periods instead of long SQQQ).

Agreed, you tend to do slightly better shorting the opposite ETF you want to go long, the downside is if your strategy starts to scale, will there be enough shares for your subscribers to short? In my opinion, the marginal gain isn’t worth the trade off. I’d rather make it easier for my subscribers to execute the trades at the proper time.

Cheers,

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Plus the occasional hard to borrow fees.

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