For the final post in this series, I want to share a real-life example: a covered call trade I closed last Friday on TQQQ.

TQQQ is a triple-leveraged QQQ ETF, so its volatility is extreme. Selling covered calls on it can be controversial. But for me, TQQQ has been my second-most profitable stock over the years. Like dating, in the market you need to find your Mr. or Miss Right—once you find the right fit with good “chemistry,” making money feels a lot easier.

That said, if you’re a beginner, I strongly suggest starting with QQQ first. Build your success rate there before moving on to triple-leveraged ETFs like TQQQ. As I mentioned in an earlier post, I’ve been through my fair share of experiments: futures, options, triple-leveraged oil & gas ETFs. Compared to that, TQQQ’s volatility barely moves the needle emotionally. And that’s a crucial point: most trading mistakes happen when emotion takes over. Greed and fear are the two biggest curses in the market. Learning to stay calm during big swings is key.

The Setup

Back in early July, TQQQ peaked at $85. I had been waiting for a pullback to start building a position. By mid-July, I began buying around $72, and continued dollar-cost averaging down to about $51 over the course of roughly two weeks.

After building the position, I started selling covered calls to reduce my cost basis. I initially sold calls with Delta around 0.2, and over nearly three months, I sold 8–9 calls in total. The premiums collected amounted to roughly $6–7 per share.

In the final weeks, I deliberately wanted to have shares called away, so I raised the Delta slightly, usually setting the strike just $1–2 above the current stock price. Rolling a week out could net nearly $1 per call in premium—a very generous yield.

The Results

Sure, if you had perfect timing—buying at $50, selling at $72, then buying at $58 and selling at $75—you could have made more. But very few people can execute like that consistently. Selling covered calls allowed me to increase my total return by roughly 60%: about $10 per share from price appreciation and $6–7 from premiums.

I’ve included some snapshots in Figures 2–15 showing:

• The scattered trades I executed

• Closing near-expiration calls at $74.6 last Friday

• Rolling the $74 call to a $75 call this past week
  
  

Current Market Conditions & Strategy

TQQQ is now in a tight triangle consolidation. It could break out above $80—but with the upcoming election, both opportunity and risk are elevated. With over $50,000 in profits, I decided to take some off the table and wait for the next opportunity.

If the July drop hadn’t fully recovered, selling covered calls would be ideal: collect premium while waiting for a rebound.

The Retail Advantage

Here’s a secret most retail traders have over Wall Street: time. We can wait. We can endure paper losses without quarterly performance reviews breathing down our necks. Floating gains and losses aren’t real until realized.

Also, a mathematical note: QQQ down 10% then up 10% returns to 99% of the original value. TQQQ down 30% then up 30% only returns to 91%. If TQQQ drops sharply, you need the courage to average down, otherwise recovery to the original level is slow. Premiums from covered calls can help buy more shares to average down.

Many say averaging down is risky, but for QQQ—the backbone of U.S. tech—it’s different. Even if one company fails, QQQ will replace it with a rising tech firm. I have faith in QQQ, in the same way Buffett says, “Never bet against America.” Without that confidence, trading TQQQ becomes dominated by fear and losses.

Words of Caution

If you bought TQQQ at its 2021 high and didn’t sell covered calls or average down, you’re still underwater. The key: don’t over-leverage. Even a once-in-a-century 30% drop in QQQ would mean a 90% drop in TQQQ.

That’s why, for beginners, I strongly advise starting with QQQ, mastering the strategy there, and only then exploring leveraged ETFs like TQQQ.

This is a great real-world example of how covered calls, patience, and discipline can work together—even on volatile leveraged ETFs.