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re: Can we have a “Leveraged ETF’s: explained” thread?
Posted on 5/1/20 at 9:31 am to RedStickBR
Posted on 5/1/20 at 9:31 am to RedStickBR
Over time would you say the major indices have had more "up" days or more "down" days?
2
Posted on 5/1/20 at 10:33 am to RoyalWe
The S&P500 has probably had more "up" days, but I would have to research to confirm.
I think it would be interesting to do a daily analysis of the S&P 500, apply the leveraged returns, and compare the results to the underlying index to determine the long-term impact of leveraged funds. Sounds like a weekend project for me- will post results.
I think it would be interesting to do a daily analysis of the S&P 500, apply the leveraged returns, and compare the results to the underlying index to determine the long-term impact of leveraged funds. Sounds like a weekend project for me- will post results.
Posted on 5/1/20 at 12:08 pm to RoyalWe
Over time, yes, there have been more up days. But let’s consider if the market trades sideways for a while within a 20% range. The index over that period would be flattish, while the leveraged ETF would suffer decay every time you cycle through the range. And what makes these so risky is that you may never recover that decay if the sideways trading persists long enough for the decay to become insurmountable.
This post was edited on 5/1/20 at 2:36 pm
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