3309 Drysdale Ct
Edwardsville, IL 62025
Actually it is a simple mathematical reason, shown by a simple example:
An index goes up 10% one day and down 10% the next (1.1 x 0.9 = 0.99) > 1% loss
Ultra 2x ETF for above index (1.2 x 0.8 = 0.96) > 4% loss
Ultra inverse ETF for above index (0.8 x 1.2 = 0.96) > 4% loss.
Note that the more volatility, the more tracking error (loss).
Does anyone know when the "doubling" takes effect and for which 30 day period they ate looking at..also I assume Fas is affected also??
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Title: Ultra ETF tracking Actually it
Leveraged ETF's
Posted by twins on 5th of Oct 2009 at 11:34 am
Actually it is a simple mathematical reason, shown by a simple example:
An index goes up 10% one day and down 10% the next (1.1 x 0.9 = 0.99) > 1% loss
Ultra 2x ETF for above index (1.2 x 0.8 = 0.96) > 4% loss
Ultra inverse ETF for above index (0.8 x 1.2 = 0.96) > 4% loss.
Note that the more volatility, the more tracking error (loss).
Fas
Posted by burkmere on 5th of Oct 2009 at 11:37 am
Does anyone know when the "doubling" takes effect and for which 30 day period they ate looking at..also I assume Fas is affected also??