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Dirty30
@Dirty30
1Sem.·

Small Saturday question

Let's assume that the US indices correct really strongly again, at least like in 2022, and the weekly RSI returns to the 50 level. Why should I invest in a normal Nasdaq from this point onwards $CSNDX (+1,34 %) when I can also use a Nasdaq 2x daily to accumulate the bottom phase $LQQ (+2,55 %) to accumulate the bottom phase and then benefit from almost double the return? A long time horizon due to an extended drawdown (as in the dotcom era) is included in the calculation. Due to the fact that a large part of the drawdown has already been swallowed and is collected monthly via DCA, high position volatility on the downside should be prevented.

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14 Commentaires
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Enrique@Dividenden_Monteur
1Sem.
I would do the same, that's exactly what leveraged ETFs are made for
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Dirty30@Dirty30
1Sem.
@Der_Dividenden_Monteur What would your approach be, or at what point does this become interesting for you?
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Moritz@leveragegrinding
1Sem.
Yep, that's it. But 2 things.

Logically, finding the ground and then selling it properly is a difficult point. Because when does the sale follow?

Above all, however, it is a 2x daily leverage (presumably, these ETFs usually are), which means that the daily performance is doubled every day. You can look up what this leads to, it's like the difference between long derivatives and factor certificates, I should also have explained this in the derivatives post (accessible via my attached post).

I think the idea is quite good, but would probably go for a knockout certificate, which doesn't reset its leverage daily. Perhaps also a call option, which offers even more opportunities in terms of correct timing
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Dirty30@Dirty30
1Sem.
@leveragegrinding That's a good point about selling. There is probably no way around profit-taking here if the index is clearly running too hot.
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Moritz@leveragegrinding
1Sem.
@Dirty30 look again, I added something at the end

And it certainly works with partial sales, but I would then rather fix the old ath or something else (maybe with fib), otherwise the return suffers a lot and the higher risk is less worthwhile
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Dirty30@Dirty30
1Sem.
@leveragegrinding That's right. Maybe just set a level to have clear parameters. I have seen your attachment, but have not yet dealt with certificates. But there's still enough time to read in 😁
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Tino@parlania
1Sem.
If you know the floor... why only 2x and not more levers?
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Dirty30@Dirty30
1Sem.
@parlania I don't know that one. That's why it should be purely accumulated via DCA.
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Tino@parlania
1Sem.
@Dirty30 can also get into 3x... more risk but more return opportunities
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Dirty30@Dirty30
1Sem.
@parlania I'll have to take a look 😁
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Tino@parlania
1Sem.
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Dirty30@Dirty30
1Sem.
@parlania I had a look. What I noticed immediately. The 3x with +62% over 1 year has only a slightly higher return than the 2x (+50%). This is probably due to the daily recalculation, as Moritz has already written.
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Chandra@Chandra
1Sem.
@Dirty30 This is also due to the fact that there was a slight downturn last year.
Compare the performance of $LQQ and $QQQ3 from the low of the bear market in 2022 until now.
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Dirty30@Dirty30
1Sem.
@Chandra I see it. from the bear market to the high it fits.
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