Should I Buy UltraPro Short QQQ (SQQQ)? Finance YouTuber Analysis

The YouTuber strongly advises against holding SQQQ for long-term investors, explaining that these 'Ultra' ETFs use derivatives to achieve leveraged daily returns, which break down significantly over longer holding periods due to volatility and compounding. He notes they are only suitable for day traders and are also very expensive, with most near a 1% expense fee.

“the more extreme index changes and the volatility gets the longer an investor holds the fund the more that 2 or 3x functioning is going to break down”

The YouTuber recommends SQQQ for short-term hedging or profiting from market downturns, as it provides a 3x inverse return on the NASDAQ 100. He highlights its effectiveness during market pullbacks, noting its strategy of holding treasury bills and using swaps to achieve the inverse leverage.

“you can also use the pro shares short QQQ the sqqq to benefit when the market Falls and this is called an inverse ETF because the goal is to rise when the QQQ index Falls”

The YouTuber recommends ProShares UltraPro Short QQQ (SQQQ) for investors with a bearish short-term outlook on the Nasdaq. This leveraged ETF returns three times the opposite move of the Nasdaq 100. If tech stocks drop again, this fund is expected to rise, having been up 135% in the first six months of the year.

“if you've got a bearish view you think stocks may be heading lower then you could buy the pro shares ultra pro short qqq that's ticker sqq this fund uses those swaps to return three times the opposite move in the nasdaq so if tech stops drop once again this fund rises”

The YouTuber notes that while SQQQ can be used for short-term hedging due to its leveraged short position against the Nasdaq, it is not suitable for long-term investment because of its high fees. He expresses a general disinterest in shorting the market.

“These aren't so much long-term investments because the fees are really high but they can be used to hedge your risk in other stocks benefiting in the short term if the market falls. I'm not sure I want to short the market.”

The YouTuber recommends investing in SQQQ, a leveraged ETF designed to produce 3x returns when tech stocks fall, if one believes tech stocks are currently overbought. It can also be used as a short-term hedge for portfolios heavily invested in tech, profiting from potential near-term declines.

“now maybe you believe tech stocks are overbought right now so you might invest in one of these bear funds to get that three times leverage of tech stocks fall a lot of investors will also use these as hedges to their portfolio as well”

The YouTuber suggests buying SQQQ puts as a hedge if the ETF continues to drop, specifically targeting the $12 strike price. He notes that if SQQQ falls to $11.67 or its support at $11, it could be a profitable trade, especially for those who did not use a stop-loss on other positions. This strategy aims to recover losses from other declining assets by profiting from SQQQ's inverse movement.

“if this go down to 1167 or to the support of $111 guys it'll be a home run”

The YouTuber states that if his Exxon Mobil position hits its stop-loss, he would likely reallocate the capital into SQQQ. He highlights SQQQ's potential for significant short-term gains (9-30% in days/weeks) compared to Exxon's slower growth, suggesting it as an alternative for faster returns.

“if my stop- loss get hit I'm going to take this 10,000 guys and I'm most likely going to put it in sqqq because no knock to exom this gives you a good dividend and it's just a good well- ran company okay so that's that's nothing to to sniff at but at the same time sqqq even though again where it's at down towards 52 we lows that goes up 9% in a day 9% in a week 10% in a 20 30% in a month like this don't do that”

The YouTuber recommends buying SQQQ as a hedge for a portfolio, expecting it to rise when the broader market, particularly tech stocks, declines. He suggests patience for a 3-month outlook, anticipating significant gains (25-30%) when the market eventually falls. He also notes that if the market continues to rise, one should be prepared to take profits.

“This is why I pound the table about you guys one being patient number two having at least a thre Month Outlook not that this is going to take that long but you want to know that I'm building something I'm not looking for an immediate reaction or return right away but I'm building this because at some point the market will come down and when it does this goes up crazy.”

The YouTuber suggests buying SQQQ when it's in the $16-$17 range, viewing it as an accumulation phase during a pullback. He expects a quick pop of 25-30% towards the $22-$23 level, advising to take profits when it reaches those targets.

“especially down here in the $17 range if you see a 17 handle a 16 handle buy this up guys cuz when this PO it's going to pop 25 30% like this okay”

The YouTuber recommends buying SQQQ when it is at or below $17, stating that it acts as a hedge for market downturns. He notes that it was up over 5.5% on the day the market crashed, validating his strategy.

“I told you guys anytime you see it 17 or below buy this because you're going to thank me on days like this okay when the market crashed I already know the same game is doing their thing okay”

The YouTuber suggests buying SQQQ as a hedge against a market downturn. He advises buying when it drops to $16-$17 and selling when it rises to $20 in a bull market, or holding it for larger gains in a bear market.

“this will come down to 16 17 and it will run up to twenty dollars in a bull market okay so you'll get 20 40 out of this give or take but then it'll come down but in a bear Market this will go up a hundred percent or two hundred percent does that make sense you're just getting in having some Hedges on your account riding it up you can take profit if you choose to and then when it come back down to 17 rinse and repeat repurchase again ride it back up.”

The YouTuber strongly recommends SQQQ as a hedging tool and a way to diversify a portfolio. He advises buying it when it's at or below $18, citing its potential for significant gains on good days and its role in protecting against market downturns.

“I told you guys get this at 17 because it's going to run up and all they got to do is run up a little bit and you up 15 don't let us have a good day guys they go up 20 30 just like this”

The YouTuber suggests buying SQQQ when the market is up and SQQQ is down, specifically noting it was at $17.90. He explains that SQQQ has an inverse relationship to the market, making it a tool to hedge portfolios when the market pulls back.

“when it's down here I want you guys to be buying in preparation for when the market comes down this goes up”

The YouTuber recommends accumulating SQQQ, an inverse ETF, when its price is below $18, or preferably below $17. This is suggested as a protective measure to be prepared for a potential market downturn, leveraging its inverse correlation with the broader market.

“under 18 if you can scoop this up so that you are ready so that you are prepared when the market does flip when the market does turn you got some protection okay and then this will take a run up when the market takes a turn down all right understand that inverse correlation so that you know why you are actually holding this inverse ETF.”

The YouTuber plans to add to his position in SQQQ if it goes lower, specifically targeting prices around $17.50 or $16.50. He views SQQQ as a hedge that benefits when the market pulls back, offering a safer way to profit from market downturns without options decay.

“This one I'll be looking to add to if this goes lower so right now we're currently sitting at 17.78 okay it was down 10 or around two dollars so say we have another down three or four or five percent type of week good for me because then I can add more at lower prices.”

The YouTuber recommends accumulating SQQQ, especially in August and September, as historically these months see market downturns. He advises buying when the price is below $18, ideally in the $16-$17 range, to take advantage of potential future rallies. This is presented as a hedge play and a way to generate profits for reinvestment.

“I love to get this under 20 preferably but if it's under 19 if it's under 18 that is even better why because the name of the game is to buy low no matter what you're doing no matter what asset it is you're buying you want to buy it low and then you take advantage of the Run High.”

The YouTuber bought 100 shares of SQQQ to hedge his portfolio against a potentially down September, citing historical trends. He advises accumulating shares, especially if it drops to the $16 or $15 range, to benefit from market downturns.

“I get and get acquired shares of Q sqq so that when the market goes down this goes up okay under 18 at this 17 level if y'all I see a 16 handle or a 15 handle dollar cost average and scoop up as many shares and route to your 1 000 shares of this”

The YouTuber suggests buying SQQQ as a hedging strategy when the market is up and SQQQ is down. He advises accumulating shares when it is trading below $18 to benefit from potential market downturns.

“under 18 guys this is where you want to be loading up okay make sure you accumulate your 100 shares and then try to get to 1 000 shares to reap the benefits of hedging your account”

The YouTuber recommends buying SQQQ as a hedge against a potential downturn in tech stocks, noting its inverse relationship with the QQQ. He suggests accumulating shares when it's at lower price points, like the $16 range, to capitalize on upward movements when the broader tech market declines.

“number one being the sqq I often talk about the importance of making sure you had your portfolio if you're not going to buy puts and understand where the markets are pivoting and changing direction at least on shares of this try to get a thousand shares of this at least on the lower end all right when it was like down here for example 16 all this 16 range you want to do what you can to buy low in this so that when this goes up boom you're up 10 in a week this is how powerful this is guys and this is why I instruct you guys to consider constructing your portfolio accordingly”

The YouTuber is buying SQQQ to hedge his portfolio, stating that when the market is down, this ETF will be up. He mentions buying shares in the $17 range and would be more aggressive if it drops to the $16 range.

“ticker symbol sqq sitting in the 17s just for the sake of showing you guys what I mean about hedging your portfolio we are going to go ahead and scoop up some of this today okay”

The YouTuber recommends buying SQQQ as a hedge against a down market, noting that it goes up when the market is down. He suggests building a position when it is trading in the 16-17 range, or ideally at $15, to balance a portfolio and profit from market pullbacks.

“I told you guys when the market is down this will go up this one is up six percent today I am making a killing just in this alone because I told you when this is down 17 16 you're building out your position guys okay because you take advantage on these days like this.”