Posted by sbaxman111 on 3rd of May 2017 at 11:10 am
On Tuesday, the SEC ignored numerous complaints, and approved a
request to trade
quadruple-leveraged exchange-traded funds, the first
product of its kind, and one which will spawn hundreds of copycat
imitators promising even greater possible returns and instead
delivering theta that is guaranteed to wipe out virtually anyone
who allocates capital to the product.
The request to list ForceShares Daily 4X US Market Futures Long
Fund, under the ticker
UP, and ForceShares Daily 4X US Market Futures Short Fund, under
the far more appropriate ticker
DOWN, was filed by the NYSE Arca exchange.
One of the funds is designed to deliver 400 percent of the daily
performance of S&P 500 stock index futures, while another fund
will aim to deliver four times the inverse of that
benchmark. That means that - in theory - a fund could go
up 8 percent on a day the index it tracks falls by 2 percent.
However, due to the rebalancing nature of such products, it most
likely won't, and instead will be used as another massively shorted
vehicle by all those pension funds who scramble to capture the
volatility roll "dividend" from markets that no longer see any
risk, anywhere.
we'll see how the 4X SPX ETF's trade. Right now SSO and
UPRO don't really degrade over time - well very slightly, over 6
months UPRO might degrade only 3%. I tested this and both SSO and
UPRO after months averaged 1.95 to 2.95 X SPY respectively. That's
pretty awesome when you consider ETF's like UNG, UGAZ, and other
ETF's that degrade horribly and can lose 30% - 50% a year!
Will be interesting to see how the 4X SPX/SPY ETF degraded,
if it's managed like SSO and UPRO that would be great.
ZH - New 4X SPX long/short etf's
Posted by sbaxman111 on 3rd of May 2017 at 11:10 am
On Tuesday, the SEC ignored numerous complaints, and approved a request to trade quadruple-leveraged exchange-traded funds, the first product of its kind, and one which will spawn hundreds of copycat imitators promising even greater possible returns and instead delivering theta that is guaranteed to wipe out virtually anyone who allocates capital to the product.
The request to list ForceShares Daily 4X US Market Futures Long Fund, under the ticker UP , and ForceShares Daily 4X US Market Futures Short Fund, under the far more appropriate ticker DOWN , was filed by the NYSE Arca exchange. One of the funds is designed to deliver 400 percent of the daily performance of S&P 500 stock index futures, while another fund will aim to deliver four times the inverse of that benchmark. That means that - in theory - a fund could go up 8 percent on a day the index it tracks falls by 2 percent. However, due to the rebalancing nature of such products, it most likely won't, and instead will be used as another massively shorted vehicle by all those pension funds who scramble to capture the volatility roll "dividend" from markets that no longer see any risk, anywhere.
Nice! bring it on LOL we'll
Posted by matt on 3rd of May 2017 at 11:15 am
Nice! bring it on LOL
we'll see how the 4X SPX ETF's trade. Right now SSO and UPRO don't really degrade over time - well very slightly, over 6 months UPRO might degrade only 3%. I tested this and both SSO and UPRO after months averaged 1.95 to 2.95 X SPY respectively. That's pretty awesome when you consider ETF's like UNG, UGAZ, and other ETF's that degrade horribly and can lose 30% - 50% a year! Will be interesting to see how the 4X SPX/SPY ETF degraded, if it's managed like SSO and UPRO that would be great.
SH and RWM
Posted by nicole4 on 3rd of May 2017 at 03:43 pm
matt are these bad to hold?
thx mate
nicole - those two are
Posted by steve on 3rd of May 2017 at 03:49 pm
nicole - those two are fine to hold when market is downtrending.