Can 2X ETF's go to zero?

Case in point:

XLF is the financial ETF

UYG is 2X financials

Both are near 20. If XLF goes to 10 will UYG go to 0? If so, what happens then?

 

If the XLF goes to 10 in 1 day then the answer i yes. Otherwise it's 2x the daily percentage move. A stock can lose 4% day for eternity.

 

Example... The ProFunds 2x Nasdaq fund...

In the 2000-2003 decline, the Nasdaq lost 78%... the "2X ProFunds Nasdaq" fund lost only 97.5%.

 

They will only asymptotically approach zero!

 

They will also do reverse splits if needed.....

 

u have a great sense of humor.

 

Sound's like a Fed trick... you know, something of no value to make it look better...

 

I asked something similar in another thread:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=133301

 

the poster is correct in that if it gets near$4-$5 they will do a huge reverse. go look at uspix from the late 90's. i was in it and they did a 15-1 reverse split as it crashed. i think split adjusted uspix went from $800 to $8 or so. 2x etf's are very dangerous eroding vehicles over time. i bet you if the mkt stayed flat the whole year skf and uyg would lose 25-40% of there value in time premium decay.

 

time premium decay?

what are you talking about fucktard?

These aren't options, they're leveraged ETFs.