I use the ETF TQQQ as a predominate piece of my portfolio in combination with its underlying options. I understand that our government would want to protect it's citizens against a product that could do harm, especially in an exponential way. Any product with inherent danger that is misused will cause harm, exponential or not. Let me give you an example. Let's say someone invested their entire 401K into an an index fund, as an example, QQQ. A prudent investor would hold, collect dividends if available and sells calls against their position. The premium on the call not only lowers your basis, but can provide consistent profit even if the market is going sideways. Let's say, in the stereotypical scenario, the market drops 50%. You are down 50% of what you have invested, plus the call premium. If you decide to invest one third of your investable funds into TQQQ and sell calls against it, the premium collected is just as much as the previous scenario, given its leverage and additional volatility. Given a 50% drop, TQQQ will drop approximately three times what the index will drop, but you will have only invested 1/3 of your investable funds making the loss much less. I hope you take this type of scenario into consideration when making your decision.
Jon Greene Comment On Regulatory Notice 22-08
I use the ETF TQQQ as a predominate piece of my portfolio in combination with its underlying options. I understand that our government would want to protect it's citizens against a product that could do harm, especially in an exponential way. Any product with inherent danger that is misused will cause harm, exponential or not. Let me give you an example. Let's say someone invested their entire 401K into an an index fund, as an example, QQQ. A prudent investor would hold, collect dividends if available and sells calls against their position. The premium on the call not only lowers your basis, but can provide consistent profit even if the market is going sideways. Let's say, in the stereotypical scenario, the market drops 50%. You are down 50% of what you have invested, plus the call premium. If you decide to invest one third of your investable funds into TQQQ and sell calls against it, the premium collected is just as much as the previous scenario, given its leverage and additional volatility. Given a 50% drop, TQQQ will drop approximately three times what the index will drop, but you will have only invested 1/3 of your investable funds making the loss much less. I hope you take this type of scenario into consideration when making your decision.