dynamic leveraging on your own

Discussion in 'Trading' started by killATwill, Feb 21, 2006.

  1. rydex and profunds do it, so i'm guessing we can too. but what if we want to leverage more than they do without blowing up? for example, how would you construct an 8X long only or 8X short only fund for the SP, that rebalances daily?

    in a perfect world without much volatility this seems like a pretty simple task to accomplish, but as we know, the world isn't perfect. a market dive could easily put you in the poorhouse, and a market spike the same as well. i love the fact that you'll never get a margin call with your rydex and profunds in either of those cases, but i'd like much more leverage than rydex and profund provide. any suggestions?

    i remember at the end of conquer the crash, prechter mentioned a bermuda-based (or maybe cayman-based?) company that did this, but i am reluctant to leave my money offshore in one place.
  2. bump if you can help me with the question above.

    another lingering question i have is why do i end up losing money if i leverage the SP500 short at 8X from Jan-1-00-Jan-1-03, but making money leveraging the SP500 short at 4X?

  3. Use the S&P futures.