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Any day where the etf moves opposite of you creates the problem. If it never goes against your bet then your return would be higher than 2x the underlying performance over that time period
thx.
so if I don't expect much volatility, buy in one direction. (triple short or long)
if I expect lots of volatility then buy both triple short AND long?
(yeah, I know.. predict volatility over the short term.)
also, when do these leveraged oil etfs reset/rebalance?
at 1pm EST when the Globex market closes?
at 4pm EST when the US stock market closes?
or?
If I'm reading it correctly the last big down turn in 08 lasted 9 months. Even though the financial collapse occurred about that time, which is not the same as this time. If history repeats itself we should be ripe for a turnaround soon.
You are crazy unless you planned to hold long term. Oil has been falling for a while now, so to think you will get it at the bottom is irresponsible. There is a saying in investing..." Never try to catch a falling knife." The trend is down. Oil is predicted to go lower for a while. I bought an inverse oil leveraged etf and it is working well for the short term because the trend is consistently down,mbut I plan to make 10% and then wait for an upward trend to go into the normal oil etf. It will take a while for oil supply to decrease and demand to increase. The rest of the world is almost sliding back into a recession. Oil supplies will not go down anytime within the next 6 months. The shell wells in the US have been drilled already so they won't shut hose down until they are tapped.
Part of the problem is the futures market is calling for oil to be $10 higher a year from now. So if you are making a "bet" on the market eventually recovering some of its lost ground its already built in. Since leveraged ETFs are in practice buying futures contracts, this must be taken into consideration.
Please forgive my ignorance about "leveraged ETFs" and most of the comments here about "losing overtime even if oil shoots up"....I'm not understanding it.
Why is it assumed that the OP will lose even if oil shoots up 'eventually'....let's say in a year or two?
Is it the fees? is it the fact that his capital is tied up and therefore he can't make any money during that time frame?
Please forgive my ignorance about "leveraged ETFs" and most of the comments here about "losing overtime even if oil shoots up"....I'm not understanding it.
Why is it assumed that the OP will lose even if oil shoots up 'eventually'....let's say in a year or two?
Is it the fees? is it the fact that his capital is tied up and therefore he can't make any money during that time frame?
The etf that produce 2 or 3 times an index attempt to produce that multiple return on a daily baisis and they buy/sell assets towards the end of everyday to set themselves up to produce 2-3 times the index's move the next trading day. If the index does nothing but go up it's not an issue, but if it goes +2% -2% +2% -2% +2%
That's +2% for the week and the etf that was supposed to pull 2x the index is only up 1.918% at best for the week
The etf that produce 2 or 3 times an index attempt to produce that multiple return on a daily baisis and they buy/sell assets towards the end of everyday to set themselves up to produce 2-3 times the index's move the next trading day. If the index does nothing but go up it's not an issue, but if it goes +2% -2% +2% -2% +2%
That's +2% for the week and the etf that was supposed to pull 2x the index is only up 1.918% at best for the week
thanks, although i can't claim i fully understand.....
so if someone bought the UCO today at 7.09, waited 2 years and sold for 13.00, how is that a bad thing again? (the assumption being that oil will eventually bounce back up to the 80-100 a barrel)
thanks, although i can't claim i fully understand.....
so if someone bought the UCO today at 7.09, waited 2 years and sold for 13.00, how is that a bad thing again? (the assumption being that oil will eventually bounce back up to the 80-100 a barrel)
Well if oil went from 50-100 that's 100% and some people would expect a 2times etf to return of 200% and if the actual performance was only 95%? Not only did you not perform 2x you underperformed the actual index
ICO is tempting. At some point OIL is gonna bounce. There's a quick 12% gain one of these days.
Keep gambling, wishing and praying... instead wait for a bottom to be established and leave the predictions for who is going to win the super bowl lol
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