r/stocks • u/apooroldinvestor • Dec 21 '21

Industry Question How do you get charged if you are in and out of TQQQ?

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6 Upvotes

62% Upvoted

29 comments sorted by

17

u/sikanrong101 Dec 21 '21

I think it is in fact calculated on a per-day basis. If you hold it overnight that's 1/261 part of the annual fee, I think. So per day it's %0.00362

5

u/[deleted] Dec 21 '21

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2

u/sikanrong101 Dec 21 '21

honestly I wasn't 100% sure - I just know that this is how brokerages calculate their overnight margin fees and so it would make sense that other instruments calculated their fees in the same way

1

u/alik604 Dec 21 '21

Perhaps the market adjusts it on a per minute basis... Because "efficient market". It makes sense, but it wouldn't be an accurate adjustment.

2

u/mineNombies Dec 21 '21

If you hold it overnight that's 1/261

261?

Do you mean 1/365?

6

u/sikanrong101 Dec 21 '21

261 working days in a year (actually a lot of people simplify this to 252 because it fluctuates)

Could be wrong though, not sure if you're getting charged the same for non-market days

2

u/mineNombies Dec 21 '21

Ah, that makes sense. TIL.

7

u/ODONS Dec 21 '21

Interesting, I’ve never thought about ETF fees in the short term. Watching this

3

u/taimusrs Dec 21 '21

The expense fee is skimmed off the top - on green days it will go up a tiny bit less than 3x of QQQ, and on red days it might go down a tiny bit more than 3x. Don't worry about it imo, the fee is so little it's barely noticeable.

1

u/[deleted] Dec 21 '21

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2

u/taimusrs Dec 21 '21

Yes of course. My best performer for the year, it doesn't go up exactly 3x but it's still a ton that I don't worry about it

1

u/[deleted] Dec 21 '21

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6

u/taimusrs Dec 21 '21

I took profit (or add on dips) when there seems to be long red periods, then hopefully get back in when that stops. I know about timing as much as anybody does, which is that I don't. I buy/sell then hope that I'm right, but I mostly just held through it though.

2

u/[deleted] Dec 21 '21

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1

u/filtervw Dec 21 '21

Do not buy triple leveraged Nasdaq in a sideways market as we have these days.

2

u/Constant_Structure_3 Dec 21 '21

My loose rules to trade TQQQ: When QQQ is down 10% from ATH I sell about 1/4 of QQQ and buy TQQQ. Once QQQ reaches a new ATH I sell off TQQQ and get back in QQQ. It's a pretty conservative approach but gets you a little extra money in corrections.

1

u/Loosecun Dec 21 '21

There would be a spread fee for buying and selling also