Is SQQQ a good investment?
SQQQ ETFs can be a great way to make money during downturns, but they are also risky and require a lot of knowledge and experience. Make sure to do your research, stay informed about the market developments, and use leverage carefully—these can all help you develop a potentially successful SQQQ trading strategy.
SQQQ Signals & Forecast
The SQQQ ETF holds a sell signal from the short-term Moving Average; at the same time, however, there is a buy signal from the long-term average. Since the short-term average is above the long-term average there is a general buy signal in the ETF giving a positive forecast for the stock.
The SQQQ is meant to be held intraday and is not a long-term investment, where expenses and decay will quickly eat into returns.
Because it passively follows the index, the QQQ share price goes up and down along with the tech-heavy Nasdaq 100. Passive management keeps fees low, and investors are rewarded with the full gains of the volatile index if it rises. But they also have to bear the Nasdaq 100's full losses when it falls.
SQQQ Dividend Information
SQQQ has a dividend yield of 8.78% and paid $1.04 per share in the past year. The dividend is paid every six months and the last ex-dividend date was Mar 20, 2024.
For any holding period other than a day, your return may be higher or lower than the Daily Target. These differences may be significant. Smaller index gains/losses and higher index volatility contribute to returns worse than the Daily Target.
The key word here is "daily." Due to how compounding works, holding SQQQ for longer periods of time may result in unpredictable returns. So, holding SQQQ long term is not recommended as the ETF suffers from significant volatility decay, causing its share price to lose value if held for too long.
Historically, SQQQ decays around 7-8% per month, though this would likely be around 4-5% per month during a flat market such as that experienced so far this year.
ProShares UltraPro Short QQQ (SQQQ)
If the Nasdaq-100 falls 1% over a day, then the fund is expected to return 3%. Since SQQQ's leverage resets on a daily basis, holding the fund beyond a single day may compound returns and provide results that are different from the target return.
As mentioned, SQQQ ETFs are inverse indexes that replicate the exact opposite movement of a real index. In other words, they move inversely to the price movement of the underlying assets. For example, if the S&P 500 drops by 4%, then the SQQQ equivalent would gain 4%.
Is SQQQ risky?
Over time, this compounding can cause significant divergence from the expected performance. Given its high-risk profile and potential for rapid loss, SQQQ is generally considered suitable only for short-term trading or as a component of a hedging strategy during market downturns.
| SQQQ Fees (% of AUM) | Category Return Low | |
|---|---|---|
| Expense Ratio | 0.99% | 0.59% |
| Management Fee | 0.75% | 0.35% |
| 12b-1 Fee | N/A | 0.00% |
| Administrative Fee | N/A | 0.03% |
The Fund seeks investment results for a single day only as calculated from NAV to NAV, not for any other period. The Fund seeks to engage in daily rebalancing to position its portfolio so that its exposure to the Index is consistent with the Fund's daily investment objective.
The SQQQ ETF is a leveraged fund that seeks to generate returns that are 3x the daily performance of the Nasdaq 100 index. In this case, the fund's objective is to achieve this goal within a single day. For example, if the index rises by 1% in a given day, the ETF will rise by 3%.
Investors may trade in the Pre-Market (4:00-9:30 a.m. ET) and the After Hours Market (4:00-8:00 p.m. ET).
ProShares UltraPro Short QQQ (SQQQ) will effect a 1-for-5 (1-5) reverse split of its outstanding shares. The reverse stock split will become effective on Thursday, January 13, 2022.
SQQQ's top 3 holdings are United States Treasury Bills 0.0% 08-AUG-2024, United States Treasury Bills 0.0% 21-MAY-2024, United States Treasury Bills 0.0% 13-JUN-2024. What is ETF SQQQ's holdings count? ETF SQQQ's is holdings 19 different assets. What are the total assets of ETF SQQQ?
Investors who wish to hold inverse ETFs for periods exceeding one day must actively manage and rebalance their positions to mitigate compounding risk.
SQQQ is a passively managed fund by ProShares that tracks the performance of the NASDAQ-100 Index (-300%). It was launched on Feb 8, 2010. QQQ is a passively managed fund by Invesco that tracks the performance of the NASDAQ-100 Index.
Leveraged ETF prices tend to decay over time, and triple leverage will tend to decay at a faster rate than 2x leverage. As a result, they can tend toward zero.
What is the best investment when the stock market crashes?
Where is your money safe if the stock market crashes? Money held in an interest bearing account like a money market account, a savings account or others is generally safe from losses stemming from a stock market decline. Bonds, including various Treasury securities can also be a safe haven.
Leveraged ETFs decay due to the compounding effect of daily returns, volatility of the market and the cost of leverage. The volatility drag of leveraged ETFs means that losses in the ETF can be magnified over time and they are not suitable for long-term investments.
SQQQ implied volatility (IV) is 50.9, which is in the 40% percentile rank. This means that 40% of the time the IV was lower in the last year than the current level. The current IV (50.9) is 2.8% above its 20 day moving average (49.5) indicating implied volatility is trending higher.
QQQ tracks the Nasdaq-100 Index passively, while TQQQ is highly levered. TQQQ seeks daily returns that are three times those of the QQQ (before fees and expenses.) QQQ experiences smaller price fluctuations and is considered to be less risky than TQQQ.
NA (SQQQ) has 6 splits in our SQQQ split history database.
