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Leveraged ETF TQQQ offers high covered call yields but carries significant risk for long-term holders.

Market News
24 Jun 2026
24/7 Wall Street
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The ProShares UltraPro QQQ (TQQQ), a leveraged ETF trading around $83, offers an affordable alternative to the expensive Invesco QQQ Trust for selling covered calls. Selling a one-month covered call at a $95 strike can yield about 4.16% monthly, potentially annualizing near 50%, though this is highly variable. However, TQQQ's high volatility and risk of large drawdowns, including an 81.65% drop historically, make holding it long-term risky, especially during downturns when covered call premiums may not cover losses. Due to these risks and its 0.82% expense ratio, investors might prefer lower-cost, unleveraged ETFs for covered call strategies despite lower yields.

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