TQQQ volatility can be defined as the annual return of TQQQ divided by the annual return of the S&P 500. On average, its volatility sits at 4, meaning TQQQ typically moves four times as much as the S&P.

However, this volatility fluctuates based on market conditions:

• In a down market: Volatility remains between 3-4.
• At market bottoms: Volatility surges to 5-8, reflecting increased activity as investors position for growth.
• Interestingly, in down markets, one might expect TQQQ volatility to rise as investors liquidate positions. Yet, the data suggests otherwise—many are willing to hold TQQQ even in tough markets because it represents the fastest-growing 50 stocks.
• When the market begins recovering, volatility spikes as more investors rush to capture the upside potential of these high-growth stocks.

Key Takeaway

TQQQ remains a highly desired holding, even during periods of market stress. This implies that during significant market downturns, particularly near year-end, TQQQ will likely see major buying activity, reducing the likelihood of prolonged losses into the following year.

Conclusion: Buying TQQQ at major market bottoms may present a relatively safe and strategic opportunity for investors seeking exposure to high-growth potential.