If the volatility of the Nasdaq 100 isn’t enough for you then you are in luck! There are now a couple different leveraged ETF products that can spice things up and get your blood pumping.
200% (2x) Leveraged Nasdaq ETF Products
The first is the ProShares Ultra QQQ which trades under the ticker symbol QLD. This contract is very popular with traders as it trades about 3 million shares per day. It’s been in existence since June 19, 2006 so it’s stood the test of time.
QLD offers 200% (2x) upside exposure to the Nasdaq 100 index. This means that on any given day a 1% move in the index should produce a 2% move in QLD. As with all leveraged ETF products this product resets each night at the close.
QID is the inverse of this product and is known as the ProShares UltraShort QQQ. It provides -200% (-2x) correlation to the performance of the Nasdaq 100 index so a 1% decline in the index should produce a 2% increase in QID (less fees and expenses).
300% (3x) Leveraged Nasdaq ETF Products
If your desire is to gain additional leverage ProShares also offer the Pro series which have 300% (3X) leverage. These are not as popular as the 2x versions but still have excellent trading volume. In fact, these funds are actually pretty popular considering they have only been around since Feb 2010.
TQQQ is the ProShares UltraPro QQQ ETF which is the 3x leveraged long version. It trades about 1 million shares per day so there is excellent liquidity. If the Nasdaq 100 moves up 1% on a given day, the goal of this fund is to move up 3% (less fees and expenses).
SQQQ is the ProShares UltraPro Short QQQ ETF which as the name implies is the leveraged short version. This one is more than twice as liquid as it’s long counterpart trading well over 2 million shares per day. The goal of this fund is to move up 3% (before fees and expenses) when the Nasdaq 100 drops 1% on any given day.
Both of these ETFs are strictly trading vehicles and are definitely not designed for the average investor. Each day at the close each of them re-calibrates to ensure proper performance the following day. This process tends to lead to a gradual erosion of value if the market isn’t moving strongly in your favor.
None of the leveraged ETF products are designed for long term investing.