Forums - *No Risk* - Simply Short UNG, VXX, SDS and every other Constantly Decaying ETF

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	Forums ›› Main ›› ETFs ›› No Risk - Simply Short UNG, VXX, SDS and every other Constantly Decaying ETF

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zdreg

Registered: Oct 2003
Posts: 8343

03-30-12 12:03 PM

Scataphagos

Registered: Apr 2009
Posts: 7608

03-28-12 10:38 AM

Quote from thesniper:

There are so many ETFs out there that seem to be constantly decaying towards zero. UNG, VXX, SDS come to mind immediately but there are like 20+ others. Why even bother trading when you can just short these ETFs and double your money almost every year.
I also wonder how the SEC can approve such ETFs that have zero chance of making anyone any money if they hold it more than a couple of days. These are the riskiest "assets" on the planet right now. I also wonder if there are hedge funds out there that exclusively short these funds.

Sooooo stupid, don't know where to begin.

let's hear a more precise answer for your critique

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masterm1ne

Registered: Dec 2009
Posts: 798

03-30-12 02:05 PM

Quote from zdreg:
let's hear a more precise answer for your critique [/B]

It's most likely related to a post I saw on here.

This guy was making good money shorting the Vix as the board market was advancing.... OK

Well S&P tanks and he lose all his profits!

To say there is no risk is just ... DUMB!

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TradeCrushers

Registered: Dec 2011
Posts: 5

04-06-12 10:57 PM

As other people have said, other traders have also recognized the decaying nature of certain ETFs and thus those are usually hard to borrow with prohibitive locate costs.

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indythink75

Registered: Apr 2012
Posts: 137

04-08-12 12:22 AM

Quote from TradeCrushers:

As other people have said, other traders have also recognized the decaying nature of certain ETFs and thus those are usually hard to borrow with prohibitive locate costs.

Very high cost to carry. Absolutely.

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