The other volatility is yearly versus the S&P. This volatility shows how much TQQQ moves for a 1% move in the S&P over a year’s time. The annual volatility for TQQQ varies from 0 to 8. The average volatility is 4. This makes sense because QQQ outperforms the S&P by about 30% per year. Three times 1.3 is about 4.

The annual volatility of TQQQ at market highs can be very low. In corrections it is about 4. In the two years after a bottom the volatility explodes as everyone wants to own the fastest appreciating stocks. The volatility can get as high as 8.

What causes the large changes in volatility? At a market high the price action may be choppy and sideways. You get a triple up followed by a triple down on daily basis. The result is no net movement which causes the annual volatility to drop to near zero. Coming off a correction low, the daily movement can be a triple up many days in a row. In a correction the volatility is lower than in the rise off a low because the price action although large to the downside tends to be choppy.

Currently the annual volatility is 1.6. TQQQ currently holds about half as much of the 4 largest stocks as the S&P. TQQQ is seeing greater relative price movement in other stocks. TQQQ is searching for new leadership. The change is very gradual.