Rarely do I highlight individual trades 'mid month'; typically I wait until the end of the month and roll them all up in my Monthly Progress Reviews. But, I haven't written in awhile and thought I would provide a quick update to my last trade.
This month I have already made 10 trades, but my last trade in particular was the 'riskiest' and most complicated trade I personally have ever done. Many pros will laugh at its simplicity, but for me as a novice retail investor, I thought it would be worth mentioning and possibly soliticing some feedback from some of my readers. All of that said, here are the details of my most recent trade:
Today I bought 200 shares of Proshares Ultrashort QQQ ETF (ticker QID). From Morningstar,
ProShares UltraShort QQQ could be suitable as a specialty satellite holding either for high-frequency traders who understand how this exchange-traded fund works and who have a very high risk tolerance, or for investors who hold a bearish conviction toward large-cap growth stocks, most of which are tech companies. This ETF also might be a fit for investors who prefer avoiding the unlimited loss potential in short-selling individual stocks, those taking a speculative position, or those seeking a near-term hedge.
I then immediately sold a covered call of 2 contracts on QID as well, making a premium of right at about $225.
I think the Nasdaq is completely too high right now, and I am expecting a pull back in the near term. Things in Greece are completely affecting the markets right now so we'll see what happens.
Anyway, what are your thoughts?
DividendPartisan
I have included two links (one my own) on the constant leverage trap associated with leveraged ETFs. Good luck with the trade.
ReplyDeletehttp://news.morningstar.com/articlenet/article.aspx?id=271892
http://cashflowmantra.com/2011/11/16/leveraged-etfs-and-the-constant-leverage-trap/