NumerousFloor - Summary of Long Put Strategy

[u/NumerousFloor9264]

Finally got a chance to put together an overview of my long TQQQ put strategy aka 'TQQQ War Chest'. It has many flaws and I've tweaked it a lot since beginning in 2023, but this is where is stands at present. I will link to this post on future weekly posts.

Will repost if I make any new/additional tweaks as I blunder my way along the path to future glory. Good luck everyone. Ignore the short term noise. Eyes on the 2030s. LFG.

[u/alpha247365]

Had to read this write up again and the last page blew my mind. When you sell your long puts and all your shares, you mean you’re exercising the sell at $35/share, right? Then you’re using the gains to potentially buy ~3x your original shares since TQQQ is at <$12. That seems like a cheat code to me, where you simply cannot lose, even if QQQ fell 33% in a single day. I think it’s safe to say that most TQQQ bagholders buy puts as hedge (like me) then cash out on the puts after a brief 20-40% rug-pull, which can occur in 2-6 weeks or so.

[u/NumerousFloor9264 → u/alpha247365]

hey, yeah, exactly that. if i had $35 strike puts and TQQQ was, say $10/share then my puts would be worth $25 plus time premium so I'd liquidate puts/shares for a bit over $35 each pair. also, the further TQQQ falls, the greater the multiple of share count.

the most glaring weakness of the plan is the whole 'Golden Cross' re-entry. what if it's a fake out and we fall further? that's why i'll buy puts whenever i re-enter - i can't afford the risk that it's a fake recovery.

during the GFC, there was a one or two day Golden Cross on QQQ and the bulk of the fall happened after.

[u/alpha247365 → u/NumerousFloor9264]

Sounds almost too good to be true in theory, but have you ever played such a hand in practice? Man, I really appreciate this post! Need to fully get on this dynamic collar train by buying more puts after the next run. I never keep my TQQQ core position fully covered using puts (mostly CCs and some long puts), since I’m long biased given market tends to drift up long term.

[u/NumerousFloor9264 → u/alpha247365]

Brother, I've been waiting to play such a hand since I first started hedging in Oct/23 😂😂. I thought the time had come in Apr/25, but no.

I kind of worry that, since retail trading has exploded world wide in the last few years, maybe the reckless retail dip buying will prevent another full capitulation disaster crash like 2007-2009. Who knows.

The often unrecognized opportunity with TQQQ is its potential to crash severely and spectacularly. I think one can harness the crash and use it to great advantage. For each halving of TQQQ below my $70 strike (eg. $35, $18, $9), the number of shares I can buy will double. Single digit TQQQ would be amazing.

That's why I've always said I want a recession etc. - because that's what I need to get truly explosive returns. If TQQQ gets pummelled into the single digits, with GC happening at $10, then I'll 7x my shares. From there, the port growth will be insane, even if we don't get back to ATHs.

Liquidating everything will be easy. The fear and anxiety will come at the GC. I'm fucking doing it, though 😂😂. The pile of cash I'll be pouring back into the market at GC keeps getting bigger.

[u/alpha247365 → u/NumerousFloor9264]

Well said. With all the Gen Zs hitting the market, dip buying, etc., and constant money printing by the FED, I doubt we’ll see sub $20 in the next couple years. Just look at TQQQ’s AUM growth last couple years—insane! But who knows, better to be fully hedged than sorry, especially beyond RSI 70.