QQQ (Invesco QQQ Trust) SMA(10)/SMA(200) crossover strategy - with 3.0x leverage via call options

Ticker

Backtesting Period

Risk-free rate (%) Learn more

Leverage

Leverage Type

Borrow Cost (%)

Time Decay (%) Learn more

When to Buy

Fast Moving Average Period

Slow Moving Average Type

Slow Moving Average Period

Confirmation Threshold (%)

When to Sell

Fast Moving Average Period

Slow Moving Average Type

Slow Moving Average Period

Confirmation Threshold (%)

Backtest a QQQ (Invesco QQQ Trust) crossover strategy: it buys when 10-day SMA crosses above 200-day SMA by 0.3% of the stock price, it sells when 10-day SMA falls below 200-day SMA by 0.3% of the stock price. Uses 3.0x leverage via call options with 3.0% annual time decay. Uninvested cash earns 4.0% risk-free interest.

Backtest Assumptions and Key Details

If the strategy involves regular stock positions, we use the adjusted close price for backtesting. This reflects total return by incorporating dividends.
If the strategy uses call options to simulate leveraged exposure, we instead use the close price (not adjusted), because dividends are not received when holding options.
When using call options, we simulate time decay in a simplified way. You can specify a time decay rate (e.g., 3%), which means that if the stock price stays flat for one year, the strategy loses 3% of the current stock price per share of exposure due to decay.
If leverage is applied via margin borrowing, we enforce a 25% maintenance margin requirement (as set by FINRA). This places a hard cap at 4x leverage, beyond which a margin call is immediate. In practice, 3x leverage is the more realistic limit, since the risk of a margin call increases sharply beyond that.
All trades are assumed to execute at the closing price on the day a signal occurs.
The backtest includes realistic cash flow effects, such as interest earned on idle cash and borrowing costs incurred when using margin.

Performance Overview

Portfolio Value Trend (Normalized)

1999-03-10 - $10,000.00 2025-07-05 - $414,028.50

Over 26.32 years, portfolio value grew from $10,000.00 to $414,028.50.

Beginning with an initial investment of $10,000.00 on 1999-03-10, the portfolio value reached a value of $414,028.50 by 2025-07-05. This represents a 4,040.29% total gain over 26.32 years, equivalent to 15.19% annualized. The return is strong and meaningfully higher than long-term market averages. It suggests effective asset selection or strategy execution during a favorable environment.

Drawdown and Risk

The maximum drawdown recorded during this period was 79.38%. This drawdown began after a peak portfolio value of $38,165.33 on 2000-03-27, and reached its lowest point on 2003-03-31 when the portfolio value fell to $7,870.52. The drawdown lasted for 1099 days.

Maximum Drawdown

📈 2000-03-27 - $38,165.33 📉 2003-03-31 - $7,870.52

Max drawdown: 79.38% over 1099 days.

The drawdown was very large, indicating high sensitivity to adverse market conditions. Strategies with this profile may offer strong upside but require enduring deep declines. The maximum drawdown lasted over three years — a very long decline that would have tested even the most patient investors. Such extended recoveries are rare but not impossible during major structural bear markets.

The Calmar Ratio — annualized return divided by maximum drawdown — was 0.19, reflecting the tradeoff between return and volatility. The Calmar Ratio is on the lower side of what's commonly seen in broad-market strategies over extended periods.

What the Strategy Suggests Today

The 10-day SMA is $543.94, and the 200-day SMA is $503.23, for a difference of $40.70. The current stock price is $556.22, and 0.3% of that is $1.67. Since the difference is sufficient and exceeds the threshold, the buy signal is active.

The 10-day SMA is $543.94, and the 200-day SMA is $503.23, for a difference of $40.70. The current stock price is $556.22, and 0.3% of that is $1.67. Since the difference is insufficient and does not exceed the threshold, the sell signal is not active.

If you have been following this strategy, you are currently holding stocks or call options. No sell signal is active. The strategy suggests continuing to hold the current position.

Transaction Timeline

We began our backtest on 1999-03-10 with $10,000.00 starting capital.

On 1999-03-31, the 10-day SMA at $51.71 crossed above the 200-day SMA at $51.53, exceeding it by 0.3% of the stock price ($52.47). We invested $10,022.58 — which includes $22.58 in interest earned while holding cash for 21 days — gaining exposure to 573.06 equivalent shares.

On 1999-05-27, the 10-day SMA at $52.68 fell below the 200-day SMA at $53.04 by 0.3% of the stock price ($51.19), triggering our exit. After holding the position for 57 days, we exited leaving $9,149.32 in available cash.

On 1999-06-21, the 10-day SMA at $53.30 crossed above the 200-day SMA at $52.99, exceeding it by 0.3% of the stock price ($56.71). We invested $9,173.92 — which includes $24.59 in interest earned while holding cash for 25 days — gaining exposure to 485.30 equivalent shares.

On 2000-05-30, the 10-day SMA at $82.42 fell below the 200-day SMA at $83.01 by 0.3% of the stock price ($85.56), triggering our exit. After holding the position for 344 days, we exited leaving $22,398.58 in available cash.

On 2000-06-06, the 10-day SMA at $84.46 crossed above the 200-day SMA at $83.81, exceeding it by 0.3% of the stock price ($91.25). We invested $22,415.43 — which includes $16.84 in interest earned while holding cash for 7 days — gaining exposure to 736.95 equivalent shares.

On 2000-08-08, the 10-day SMA at $90.57 fell below the 200-day SMA at $91.04 by 0.3% of the stock price ($94.13), triggering our exit. After holding the position for 63 days, we exited leaving $24,190.41 in available cash.

On 2000-08-17, the 10-day SMA at $92.47 crossed above the 200-day SMA at $92.06, exceeding it by 0.3% of the stock price ($95.75). We invested $24,213.80 — which includes $23.39 in interest earned while holding cash for 9 days — gaining exposure to 758.66 equivalent shares.

On 2000-09-18, the 10-day SMA at $94.06 fell below the 200-day SMA at $94.51 by 0.3% of the stock price ($89.88), triggering our exit. After holding the position for 32 days, we exited leaving $19,568.33 in available cash.

On 2001-12-12, the 10-day SMA at $41.07 crossed above the 200-day SMA at $40.73, exceeding it by 0.3% of the stock price ($41.56). We invested $20,537.13 — which includes $968.80 in interest earned while holding cash for 450 days — gaining exposure to 1,482.47 equivalent shares.

On 2001-12-26, the 10-day SMA at $40.13 fell below the 200-day SMA at $40.32 by 0.3% of the stock price ($39.69), triggering our exit. After holding the position for 14 days, we exited leaving $17,695.06 in available cash.

On 2002-01-08, the 10-day SMA at $40.42 crossed above the 200-day SMA at $40.20, exceeding it by 0.3% of the stock price ($41.49). We invested $17,719.78 — which includes $24.72 in interest earned while holding cash for 13 days — gaining exposure to 1,281.26 equivalent shares.

On 2002-01-22, the 10-day SMA at $39.96 fell below the 200-day SMA at $40.14 by 0.3% of the stock price ($37.40), triggering our exit. After holding the position for 14 days, we exited leaving $12,419.18 in available cash.

On 2003-01-15, the 10-day SMA at $26.45 crossed above the 200-day SMA at $26.32, exceeding it by 0.3% of the stock price ($26.74). We invested $12,905.90 — which includes $486.73 in interest earned while holding cash for 358 days — gaining exposure to 1,447.93 equivalent shares.

On 2003-01-27, the 10-day SMA at $25.73 fell below the 200-day SMA at $26.01 by 0.3% of the stock price ($24.53), triggering our exit. After holding the position for 12 days, we exited leaving $9,668.36 in available cash.

On 2003-03-18, the 10-day SMA at $25.05 crossed above the 200-day SMA at $24.75, exceeding it by 0.3% of the stock price ($26.93). We invested $9,720.41 — which includes $52.05 in interest earned while holding cash for 50 days — gaining exposure to 1,082.85 equivalent shares.

On 2004-05-14, the 10-day SMA at $35.10 fell below the 200-day SMA at $35.22 by 0.3% of the stock price ($34.75), triggering our exit. After holding the position for 423 days, we exited leaving $17,172.75 in available cash.

On 2004-06-01, the 10-day SMA at $35.62 crossed above the 200-day SMA at $35.48, exceeding it by 0.3% of the stock price ($36.50). We invested $17,205.97 — which includes $33.23 in interest earned while holding cash for 18 days — gaining exposure to 1,414.19 equivalent shares.

On 2004-07-16, the 10-day SMA at $35.65 fell below the 200-day SMA at $35.95 by 0.3% of the stock price ($34.67), triggering our exit. After holding the position for 45 days, we exited leaving $14,429.68 in available cash.

On 2004-10-13, the 10-day SMA at $35.94 crossed above the 200-day SMA at $35.83, exceeding it by 0.3% of the stock price ($35.61). We invested $14,568.25 — which includes $138.57 in interest earned while holding cash for 89 days — gaining exposure to 1,227.32 equivalent shares.

On 2005-03-28, the 10-day SMA at $36.58 fell below the 200-day SMA at $36.74 by 0.3% of the stock price ($36.34), triggering our exit. After holding the position for 166 days, we exited leaving $14,873.08 in available cash.

On 2005-05-25, the 10-day SMA at $37.13 crossed above the 200-day SMA at $36.86, exceeding it by 0.3% of the stock price ($37.81). We invested $14,966.01 — which includes $92.92 in interest earned while holding cash for 58 days — gaining exposure to 1,187.46 equivalent shares.

On 2005-07-05, the 10-day SMA at $37.17 fell below the 200-day SMA at $37.33 by 0.3% of the stock price ($37.11), triggering our exit. After holding the position for 41 days, we exited leaving $13,985.56 in available cash.

On 2005-07-14, the 10-day SMA at $37.60 crossed above the 200-day SMA at $37.43, exceeding it by 0.3% of the stock price ($38.77). We invested $13,999.08 — which includes $13.52 in interest earned while holding cash for 9 days — gaining exposure to 1,083.24 equivalent shares.

On 2006-05-19, the 10-day SMA at $40.46 fell below the 200-day SMA at $40.62 by 0.3% of the stock price ($39.35), triggering our exit. After holding the position for 309 days, we exited leaving $13,563.88 in available cash.

On 2006-09-26, the 10-day SMA at $40.18 crossed above the 200-day SMA at $40.03, exceeding it by 0.3% of the stock price ($40.77). We invested $13,754.56 — which includes $190.68 in interest earned while holding cash for 130 days — gaining exposure to 1,012.11 equivalent shares.

On 2008-01-14, the 10-day SMA at $48.66 fell below the 200-day SMA at $48.98 by 0.3% of the stock price ($47.87), triggering our exit. After holding the position for 475 days, we exited leaving $19,323.41 in available cash.

On 2008-05-12, the 10-day SMA at $48.36 crossed above the 200-day SMA at $48.10, exceeding it by 0.3% of the stock price ($49.09). We invested $19,571.92 — which includes $248.51 in interest earned while holding cash for 119 days — gaining exposure to 1,196.08 equivalent shares.

On 2008-06-23, the 10-day SMA at $48.03 fell below the 200-day SMA at $48.26 by 0.3% of the stock price ($47.05), triggering our exit. After holding the position for 42 days, we exited leaving $16,932.00 in available cash.

On 2008-08-18, the 10-day SMA at $47.34 crossed above the 200-day SMA at $47.07, exceeding it by 0.3% of the stock price ($47.60). We invested $17,034.12 — which includes $102.13 in interest earned while holding cash for 56 days — gaining exposure to 1,073.58 equivalent shares.

On 2008-09-03, the 10-day SMA at $46.50 fell below the 200-day SMA at $46.78 by 0.3% of the stock price ($45.12), triggering our exit. After holding the position for 16 days, we exited leaving $14,305.43 in available cash.

On 2009-05-06, the 10-day SMA at $34.17 crossed above the 200-day SMA at $33.98, exceeding it by 0.3% of the stock price ($35.03). We invested $14,686.78 — which includes $381.35 in interest earned while holding cash for 245 days — gaining exposure to 1,257.79 equivalent shares.

On 2010-07-01, the 10-day SMA at $45.03 fell below the 200-day SMA at $45.23 by 0.3% of the stock price ($42.59), triggering our exit. After holding the position for 421 days, we exited leaving $22,668.62 in available cash.

On 2010-07-30, the 10-day SMA at $45.69 crossed above the 200-day SMA at $45.52, exceeding it by 0.3% of the stock price ($45.81). We invested $22,739.32 — which includes $70.70 in interest earned while holding cash for 29 days — gaining exposure to 1,489.15 equivalent shares.

On 2010-08-20, the 10-day SMA at $45.44 fell below the 200-day SMA at $45.77 by 0.3% of the stock price ($44.92), triggering our exit. After holding the position for 21 days, we exited leaving $21,297.93 in available cash.

On 2010-09-15, the 10-day SMA at $46.35 crossed above the 200-day SMA at $45.92, exceeding it by 0.3% of the stock price ($47.75). We invested $21,357.48 — which includes $59.55 in interest earned while holding cash for 26 days — gaining exposure to 1,341.83 equivalent shares.

On 2011-06-22, the 10-day SMA at $54.64 fell below the 200-day SMA at $54.81 by 0.3% of the stock price ($54.83), triggering our exit. After holding the position for 280 days, we exited leaving $29,389.18 in available cash.

On 2011-07-01, the 10-day SMA at $55.64 crossed above the 200-day SMA at $55.13, exceeding it by 0.3% of the stock price ($57.91). We invested $29,417.60 — which includes $28.42 in interest earned while holding cash for 9 days — gaining exposure to 1,523.96 equivalent shares.

On 2011-08-09, the 10-day SMA at $55.67 fell below the 200-day SMA at $56.12 by 0.3% of the stock price ($53.03), triggering our exit. After holding the position for 39 days, we exited leaving $21,701.66 in available cash.

On 2011-10-20, the 10-day SMA at $56.70 crossed above the 200-day SMA at $56.32, exceeding it by 0.3% of the stock price ($56.59). We invested $21,870.10 — which includes $168.44 in interest earned while holding cash for 72 days — gaining exposure to 1,159.40 equivalent shares.

On 2011-11-23, the 10-day SMA at $56.08 fell below the 200-day SMA at $56.37 by 0.3% of the stock price ($53.29), triggering our exit. After holding the position for 34 days, we exited leaving $17,863.31 in available cash.

On 2011-12-12, the 10-day SMA at $56.51 crossed above the 200-day SMA at $56.25, exceeding it by 0.3% of the stock price ($56.38). We invested $17,899.79 — which includes $36.48 in interest earned while holding cash for 19 days — gaining exposure to 952.45 equivalent shares.

On 2011-12-19, the 10-day SMA at $55.83 fell below the 200-day SMA at $56.19 by 0.3% of the stock price ($54.32), triggering our exit. After holding the position for 7 days, we exited leaving $15,907.30 in available cash.

On 2012-01-06, the 10-day SMA at $56.48 crossed above the 200-day SMA at $56.22, exceeding it by 0.3% of the stock price ($57.81). We invested $15,938.08 — which includes $30.78 in interest earned while holding cash for 18 days — gaining exposure to 827.09 equivalent shares.

On 2012-11-08, the 10-day SMA at $65.03 fell below the 200-day SMA at $65.34 by 0.3% of the stock price ($63.16), triggering our exit. After holding the position for 307 days, we exited leaving $19,160.19 in available cash.

On 2013-01-09, the 10-day SMA at $65.84 crossed above the 200-day SMA at $65.61, exceeding it by 0.3% of the stock price ($66.77). We invested $19,288.18 — which includes $127.99 in interest earned while holding cash for 62 days — gaining exposure to 866.62 equivalent shares.

On 2015-08-26, the 10-day SMA at $106.23 fell below the 200-day SMA at $106.87 by 0.3% of the stock price ($103.03), triggering our exit. After holding the position for 959 days, we exited leaving $46,042.18 in available cash.

On 2015-10-22, the 10-day SMA at $107.53 crossed above the 200-day SMA at $107.15, exceeding it by 0.3% of the stock price ($109.71). We invested $46,324.86 — which includes $282.68 in interest earned while holding cash for 57 days — gaining exposure to 1,266.74 equivalent shares.

On 2016-01-12, the 10-day SMA at $108.53 fell below the 200-day SMA at $109.12 by 0.3% of the stock price ($105.54), triggering our exit. After holding the position for 82 days, we exited leaving $40,117.21 in available cash.

On 2016-04-01, the 10-day SMA at $108.26 crossed above the 200-day SMA at $107.78, exceeding it by 0.3% of the stock price ($110.36). We invested $40,463.33 — which includes $346.12 in interest earned while holding cash for 80 days — gaining exposure to 1,099.95 equivalent shares.

On 2016-05-05, the 10-day SMA at $106.85 fell below the 200-day SMA at $107.68 by 0.3% of the stock price ($105.02), triggering our exit. After holding the position for 34 days, we exited leaving $34,255.14 in available cash.

On 2016-05-31, the 10-day SMA at $107.72 crossed above the 200-day SMA at $107.32, exceeding it by 0.3% of the stock price ($110.34). We invested $34,350.91 — which includes $95.77 in interest earned while holding cash for 26 days — gaining exposure to 933.96 equivalent shares.

On 2016-06-24, the 10-day SMA at $107.33 fell below the 200-day SMA at $107.66 by 0.3% of the stock price ($104.29), triggering our exit. After holding the position for 24 days, we exited leaving $28,500.12 in available cash.

On 2016-07-12, the 10-day SMA at $108.35 crossed above the 200-day SMA at $107.79, exceeding it by 0.3% of the stock price ($111.49). We invested $28,555.26 — which includes $55.14 in interest earned while holding cash for 18 days — gaining exposure to 768.37 equivalent shares.

On 2018-10-29, the 10-day SMA at $171.42 fell below the 200-day SMA at $172.15 by 0.3% of the stock price ($163.23), triggering our exit. After holding the position for 839 days, we exited leaving $62,292.13 in available cash.

On 2019-03-01, the 10-day SMA at $172.94 crossed above the 200-day SMA at $172.18, exceeding it by 0.3% of the stock price ($174.39). We invested $63,120.35 — which includes $828.22 in interest earned while holding cash for 123 days — gaining exposure to 1,085.85 equivalent shares.

On 2020-03-16, the 10-day SMA at $197.92 fell below the 200-day SMA at $199.52 by 0.3% of the stock price ($169.30), triggering our exit. After holding the position for 381 days, we exited leaving $51,663.67 in available cash.

On 2020-04-17, the 10-day SMA at $203.05 crossed above the 200-day SMA at $200.45, exceeding it by 0.3% of the stock price ($215.29). We invested $51,841.50 — which includes $177.83 in interest earned while holding cash for 32 days — gaining exposure to 722.40 equivalent shares.

On 2022-01-26, the 10-day SMA at $363.84 fell below the 200-day SMA at $365.72 by 0.3% of the stock price ($344.57), triggering our exit. After holding the position for 649 days, we exited leaving $136,845.85 in available cash.

On 2023-02-02, the 10-day SMA at $293.49 crossed above the 200-day SMA at $291.67, exceeding it by 0.3% of the stock price ($311.72). We invested $142,422.99 — which includes $5,577.14 in interest earned while holding cash for 372 days — gaining exposure to 1,370.68 equivalent shares.

On 2025-03-12, the 10-day SMA at $490.43 fell below the 200-day SMA at $493.12 by 0.3% of the stock price ($476.92), triggering our exit. After holding the position for 769 days, we exited leaving $341,423.88 in available cash.

On 2025-05-14, the 10-day SMA at $493.95 crossed above the 200-day SMA at $491.96, exceeding it by 0.3% of the stock price ($518.68). We invested $343,741.48 — which includes $2,317.60 in interest earned while holding cash for 63 days — gaining exposure to 1,988.17 equivalent shares.

As of 2025-07-05, we hold an options position equivalent to 1,988.17 shares using call options (leveraged exposure). The net liquidation value of $414,028.50 accounts for all time decay costs.