What happens in the scenario the tracking index drops lets say 40% (-120%)? will the ETF go to $0.0001 or what ever the lowest quote available is and stay there until the index start moving up again.
Is there any difference between 100% 200% 300% ETFs in account with risk-based margin? As I understand it - the margin should be identical. I.e. I mean the margin will be the same, if I go long 200 SPY or 100 SSO. Except maybe short/bear variety of leveraged ETFs, since they limit risk. HLB
When trading standard equities I cut all loses at 8%. No exceptions. With the 3X ETF's I am using 20-24%. But I have not come up against that yet since I relying on trading the trends with my Market Club system and I am having 100% success since these 3X ETF's came out. That will change when the markets start trending positive again. But for now it's easy, we are going lower! http://crudeoiltrader.blogspot.com
Hi Guys This may be a stupid question, but can someone tell me what is the difference between the following 2 scenarios: 1. Going LONG the 3x BEAR ETF or 2. Going Short the 3 x BULL ETF These in theory have the same payoff, but is there any difference in the financing of these positions. i.e. Do i recieve in interest on the Short Bull ETF, or Lonf Bear ETF, or neither/both. Just curious. Cheers
ETFs are really setting the stage for something even bigger.... The 1x2x3x4x model should be applied on all securities ie with a $10 base.... There really should be no more mutual funds, hedge funds, $1000 par bonds, 3% down commodities..... Why not let all securites reflect a $10 initial....with 1x2x3x4x shares.... Secondly impose size limits in accordance with market size.... Direct Access to all securities.....20 cents per 100 shares.....no margin accounts per se..... Welcome to a cleaner, more open, worldwide securities exchange....in the language and currency of choice..... Securities information....supplied by the Google-Wiki model.... All qualified entrants....boilerplate...acccounting and reporting boilerplate..... MS, GS, and the rest are dinosaurs deserving extinction.... All out in the open.......all assets held and serviced by qualified financial institutions.... In the US....simple....a bank client on the internet can choose cds....or anything else.....laid out on a silver platter.....