Leveraged ETFs and strategies
Leveraged ETFs can multiply gains and losses, and they behave differently from what their names suggest. These pages explain the mechanics first, then the well-known strategies built on them, with their published results and their risks. Education only, not advice.
Leveraged ETFs explained
How leveraged ETFs like TQQQ and UPRO work, why they reset daily, how volatility decay erodes them, and what their historical drawdowns look like.
Inverse ETFs
How inverse ETFs like SH and SQQQ aim to rise when markets fall, why they decay over time, and why they are poor long-term hedges.
Volatility decay
What volatility decay (beta slippage) is, why leveraged ETFs lose value in choppy markets, a worked example, and the formula that estimates the drag.
3 Sig (the 3% Signal)
Jason Kelly's 3% Signal explained: quarterly value averaging between a stock fund and bonds, the signal line, the 30 Down rule, backtest results and risks.
6 Sig
The 6 Sig strategy applies Kelly's signal line to MVV, a 2x leveraged midcap fund, with a 6% quarterly target. Rules, 30 Down reset, results and risks.
9 Sig
The 9 Sig strategy uses Kelly's quarterly signal line on TQQQ with a 9% target. Rules, the buying throttle, Spike Reset, 30 Down history, results and risks.
TQQQ For The Long Term (FTLT)
The TQQQ For The Long Term strategy explained: its 200-day regime filter, RSI branches, the research behind it, backtest claims and the risks it carries.
Holy Grail strategy
The Holy Grail leveraged strategy, a variant of TQQQ For The Long Term that uses TQQQ's own trend, a cash buffer and SOXL dip buying. Rules and risks.
HFEA (Hedgefundie's Excellent Adventure)
HFEA explained: the 55% UPRO and 45% TMF leveraged risk parity portfolio, its stock-bond thesis, backtests, what happened in 2022, and its variants.
Managed futures
What managed futures funds like KMLM and DBMF do, how trend following across asset classes works, and why they are used as a diversifier in bad years.
Leveraged strategies compared
A side-by-side comparison of six leveraged ETF strategies, 3 Sig, 6 Sig, 9 Sig, TQQQ FTLT, Holy Grail and HFEA, by holdings, signals, results and risk.