Daily Options Selling Strategy | Sihak Ants’ Selling Triggers TQQQ Pullback—How to Navigate Volatility in Leveraged ETFs?

I. Market Barometer

The three major U.S. equity indices pulled back in the previous trading session, with the Nasdaq 100 under slight pressure. $ProShares UltraPro QQQ ETF (TQQQ.US)$ It declined by 0.76%, drawing market attention due to concentrated selling by 'Sihak Ants' (a Korean term for retail investors enthusiastic about overseas equities). The high volatility of leveraged ETFs has created a premium window for options sellers.

II. Focus on Hot Targets

TQQQ: Selling pressure from Korean retail investors weighs on the leveraged ETF, which sees high turnover and struggles near recent highs

$ProShares UltraPro QQQ ETF (TQQQ.US)$ It closed down 0.76% in the previous session at $86.56, hitting an intraday high of $88.09 and a low of $85.41. Turnover was approximately 13.29%, with trading volume reaching $5.382 billion, indicating intense capital positioning.

From a technical perspective, TQQQ has posted massive cumulative gains since its 2025 low. The current price of $86.56 sits near short-term moving averages, with technical indicators reflecting fierce bullish-bearish contention. Intraday, the stock rose to $88.09 before retreating, signaling significant overhead selling pressure. Near-term support lies around the psychological $85 level; a break below could test the 10-day moving average at $82.

Part of TQQQ's downward pressure stems from inflation concerns triggered by rising crude oil prices, and partly from concentrated selling by Korean retail investors. According to data from Korea Securities Depository, during the week of May 26 to June 1, Korean retail investors (locally nicknamed 'Ants') net sold approximately KRW 107.4 billion worth of TQQQ. Analysts note that with the recent launch of domestic leveraged ETF products in Korea, retail investors can now access leveraged exposure without bearing cross-border transaction tax differentials or time-zone inconveniences, leading to a structural shift in demand. This selling pressure, combined with profit-taking on the Nasdaq 100 Index near record highs, has contributed to TQQQ’s elevated volatility.

In the options market, implied volatility remains elevated at the 79th percentile. Option premiums still offer attractive yields, and the put/call volume ratio has risen steadily to 1.13, indicating some investors are already hedging against a potential index pullback.

III. Seller Options Strategy

1. Cash Secured Put

Sell 1 contract of $ProShares UltraPro QQQ ETF (TQQQ.US)$ 260717 70 Put; estimated required margin (for reference only): $7,000 ($70 × 100)

Opportunity Screening Logic:

For investors who do not yet hold a position but wish to participate in the long-term growth thesis of the Nasdaq 100 Index, TQQQ is currently trading near all-time highs and facing short-term pressure from Korean retail selling. Chasing the price upward carries significant pullback risk.

However, TQQQ’s underlying asset—the Nasdaq 100 Index—includes core beneficiaries of the AI era such as NVIDIA, underpinning a robust long-term structural growth outlook. By selling puts, investors can collect premium income to enhance the annualized return on idle cash (thanks to rich premiums from high implied volatility) if the stock consolidates or continues rising near current elevated levels. Should the price retreat toward the $70 strike due to selling pressure, they would also acquire shares at a relatively low cost.

2. Covered Call

Holding 100 shares $ProShares UltraPro QQQ ETF (TQQQ.US)$Underlying stock: Sell 1 TQQQ 260618 90 Call

Opportunity filtering logic:

For investors already holding TQQQ with substantial unrealized gains, the stock faces psychological resistance at the round-number $90 level in the short term, following significant appreciation accumulated over a prolonged bull market.

Investors remain bullish on the AI-driven growth narrative of the Nasdaq 100 Index over the long term, but are concerned about sharp near-term volatility triggered by profit-taking—TQQQ, as a 3x leveraged ETF, exhibits significant daily price swings, and its drawdown risk cannot be ignored.

Selling covered calls at this point can generate substantial option premiums to lower the cost basis of the position. If the stock price consolidates within the current high range, the premium income can effectively offset time decay; if the price continues to rally strongly above $90 and the option is exercised, it would effectively lock in profits near all-time highs.

IV. Risk Control Reminder

Although the seller strategy has a high probability of success, investors must still manage risks effectively:

– Position management is key:The biggest risk for option sellers lies in black swan events. It is recommended that margin exposure for a single underlying should not exceed 20% of total capital. Never sell options beyond your capacity for the sake of greedy premiums.

– Timely rolling of covered call options: When a covered call option becomes deeply in-the-money (stock price far exceeds the strike price), and if the underlying stock is still viewed favorably, decisively 'roll' the position — that is, close the current option by buying it back and simultaneously sell an option with a later expiration date and a higher strike price to avoid having the stock called away at a low price.

– Cash-secured put options warn of 'left-tail risk':For cash-secured puts, if the stock price collapses due to deteriorating fundamentals (rather than a normal pullback), do not hold on stubbornly. At this time, stop losses should be executed, or 'rolling down' can be employed to buy time and wait for volatility to normalize.

Make good use of the options seller zone to understand the income strategies for selling optionsEarn option premiums!

Options Risk Warning

An option is a contract that grants the holder the right, but not the obligation, to buy or sell an asset at a fixed price on a specific date or at any time before that date. The price of an option is influenced by various factors, including the current price of the underlying asset, the strike price, time to expiration, and implied volatility. Implied volatility reflects the market’s expectations for the level of volatility in the option over a future period. It is a data point derived inversely from the Black-Scholes option pricing model and is generally regarded as an indicator of market sentiment. When investors anticipate greater volatility, they may be more willing to pay a higher price for options to hedge risks, resulting in higher implied volatility. Traders and investors use implied volatility to assess the attractiveness of option prices, identify potential mispricings, and manage risk exposure.

Disclaimer

This content does not constitute any offer, solicitation, recommendation, opinion, or guarantee for any securities, financial products, or tools. The risk of loss in trading options can be substantial. In some cases, losses incurred may exceed the initial margin deposited. Even if you set contingency orders, such as 'stop-loss' or 'limit' orders, these may not necessarily prevent losses. Market conditions may make such orders unexecutable. You may be required to deposit additional margin within a short period. If you fail to provide the required amount within the specified time, your open positions may be liquidated. However, you will still be responsible for any shortfall in your account resulting from such liquidation. Therefore, before trading, you should study and understand options and carefully consider whether such trading suits you based on your financial situation and investment objectives. If you trade options, you should be familiar with the procedures for exercising options and the rights and obligations upon expiration. Options trading involves extremely high risks and is not suitable for all investors. Investors should read Characteristics and Risks of Standardized Options carefully before engaging in any options trading strategy.

Editor/Doris

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