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Posted on 2/1/16 at 3:15 pm to ell_13
quote:
Basically if you truly think oil is going back up from here
Well, thats a given, who knows when though. 600 just a couple years ago is insane.
This seems more like a, if I see this thing get to 1.50 or lower I may throw something at it and see what happens.
Posted on 2/1/16 at 3:15 pm to Brettesaurus Rex
It was at 1.42 on Jan 20th. Wish I had gotten in then.
Posted on 2/1/16 at 3:17 pm to ell_13
So I read a little on it...and it's basically you shouldn't invest in one of these for longer than a short period of time basically. What's the deal with that? Besides the obvious exponential risk at play.
Posted on 2/1/16 at 3:20 pm to Brettesaurus Rex
Decay
Posted on 2/1/16 at 3:21 pm to Old Sarge
quote:
So it can never go to 0?
Technically it won't ever go to zero, but close enough. They will just keep doing a reverse split - that's why you see the $600 to $2. It's decay.
What You Need To Know About The Decay Of Leveraged ETFs
It will never get back to $600 unless oil jumps to like $300/barrel overnight.
Posted on 2/1/16 at 3:31 pm to TigerDeBaiter
Wow so basically even if you go from 2.00 to 2.50 and back down to 2.50 you're losing money even further past the original your original position because of the exponential nature. Now I see why you really want to try and time it for the short term and just not sit on it bouncing up and down.
So really the play here is seeing if it keeps going down, get in and hope to ride it up for a week or two, then get out.
So really the play here is seeing if it keeps going down, get in and hope to ride it up for a week or two, then get out.
Posted on 2/1/16 at 3:40 pm to Omada
quote:
without even having permission to trade futures.
seek permission. I did.
Posted on 2/1/16 at 3:42 pm to Brettesaurus Rex
quote:
So really the play here is seeing if it keeps going down, get in and hope to ride it up for a week or two, then get out.
short term hold, profit, then bail. It's why they say trade over invest.
Posted on 2/1/16 at 4:10 pm to Fat Bastard
So when it's going to split/decay every couple of days is a complete unknown, thus the high risk?
Posted on 2/1/16 at 4:15 pm to Old Sarge
My understanding is it only decays if it goes up and then back down. If it's on a steady incline you're not going to lose anything.
The example from the link was that say it goes up 25% and then comes back down 20%. Even though you may think you're still "up" you're lower than when you started.
The example from the link was that say it goes up 25% and then comes back down 20%. Even though you may think you're still "up" you're lower than when you started.
Posted on 2/1/16 at 4:20 pm to Brettesaurus Rex
It tracks an index. The index is going to hold (or at least track) a front month futures contract. So, they might, or might not, suffer from the cost to roll this contract forward.
Something you want certainty about before you traded it. I looked quick and my guess is that this condition doesn't exist, but I looked quick.
Edit - It's an ETN as well. A note. A debt instrument. And upon some additional checking, I do think it's subject to rolling forward. So you might want to trade around the roll dates every month.
Something you want certainty about before you traded it. I looked quick and my guess is that this condition doesn't exist, but I looked quick.
Edit - It's an ETN as well. A note. A debt instrument. And upon some additional checking, I do think it's subject to rolling forward. So you might want to trade around the roll dates every month.
This post was edited on 2/1/16 at 4:23 pm
Posted on 2/1/16 at 6:37 pm to Brettesaurus Rex
quote:
So really the play here is seeing if it keeps going down, get in and hope to ride it up for a week or two, then get out.
Most people that trade these types of things don't hold overnight. They "scalp" the volatility (ie buy for $2.00 and have a tight stop up and down) or try to ride the current momentum of the day/week. For example last week with all the production cut rumors. But yeah, if you "knew" the bottom was in (nobody does) you could buy and ride it up. But nobody really knows that.
Posted on 2/2/16 at 8:39 am to TigerDeBaiter
Hope no one bought into that thing yesterday, dropped .27 already this morning
Posted on 2/2/16 at 8:45 am to Brettesaurus Rex
I know, right.... Even worse are all the people the bought Friday. Back to back beatdowns. 
Posted on 2/2/16 at 9:22 am to TigerDeBaiter
Looks like most of oil is getting hit. Everyone realizing last week was a pipe dream. Although I may be buying in even more if it keeps going
Posted on 2/2/16 at 9:47 am to Brettesaurus Rex
I'm DCAing all the way down. That way i don't have to worry about timimg the exact bottom.
Posted on 2/2/16 at 9:59 am to Fat Bastard
Most of the time DCA is just a misnomer for doubling down on a bad bet.
Posted on 2/2/16 at 10:07 am to Athanatos
If it something that you know is coming back, it's not really. you're just lowering and lowering your buy in average. And with Oil you know it's coming back.
Posted on 2/2/16 at 10:27 am to Athanatos
quote:
Most of the time DCA is just a misnomer for doubling down on a bad bet.
I work in the O&G industry like many others here. The majors I invest in will be back plus we are still getting dividends. If DCAing is doubling down on a bad bet then we must have lots of bad bets in people's IRA's!
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