I sold a Big Lizard in DRAM this morning, and no matter how high it goes, I still get paid. DRAM went zero to $10B in 7 weeks, a pace only the biggest Bitcoin and gold launches have matched. I went through the holdings file: 3 companies are 70% of this memory chip fund, and it's paying 74.6% implied volatility. Almost nobody trades a Big Lizard. Full trade structure in today's article

Many people here trade options on leveraged ETFs. I simulated TQQQ back to QQQ's inception in March 1999, with financing costs and the fund's expense ratio built into the model. Almost every leveraged ETF discussion eventually runs into assumption 3x daily leverage should produce something close to 3x the long-term return. The pre-2010 series models 3x daily exposure to QQQ, with financing costs on the borrowed notional and the fund's expense ratio subtracted daily. Starting in 2010, the simulated series is spliced directly into TQQQ's real, traded adjusted price history, so everything after that point comes from actual market data. The results, $10,000 invested in March 1999: - QQQ: $10,000 → $167,265 (11% annualized) - TQQQ (simulated pre-2010, real data after): $10,000 → $24,569 (3.4% annualized) Maximum drawdown over the same 27 years: - QQQ: -82.96% - TQQQ: -99.98% A -99.98% drawdown means every $10,000 fell to $2. TQQQ carried far more risk the entire way and still finished with $14,569 in total profit against QQQ's $157,265, under 10% of the unleveraged return. The volatility drag (beta slippage) scales with the square of the leverage multiple. So double the leverage and the drag roughly quadruples, triple it and the drag runs close to nine times larger. That is why I don't trade options on leveraged ETFs. You would be layering theta and IV risk on top of an instrument that is already decaying by design and has never been tested by the environment that would break it.

Just started the 14 day free trial. There's a lot of strategies that it screens to find a trade that meets your criteria. The details are impressive.

I started using the free version of this a few months ago. It seems helpful for visualizing the profit zone of various options strategies, hence the name. The paid version has real time options pricing, but I have been refreshing to see a delayed quote. How many other members use this?

Good article on Theta. https://optionsamurai.com/blog/theta-options