re: Can we have a “Leveraged ETF’s: explained” thread?

Why to not buy leveraged ETFs:

1. They are very expensive.

2. There is nothing you can buy to get 3xS&P500, so they use many complex strategies to attempt to achieve this. Most folks would think volatility is your friend, but when using option strategies and being forced to rebalance to match an index in some cases on a daily basis, volatility up or down usually creates much more losses than gains.

3. Leverage cuts both ways, but protecting on the downside could be argued is more valuable than outperformance on the updside. Why? If you lose 10% value, it will take about 11% gain to get back to even. A 25% loss needs a 33% gain, a 50% loss needs a 100% gain, and an 80% loss needs a 500% gain.

TLDR - Don't buy leveraged ETFs for the long term