if IYR = $10, then URE = ???

Discussion in 'ETFs' started by clambill, Mar 7, 2009.

  1. I don't know if links are allowed but I saw a pretty scary video on yahoo (looked at the headlines on URE and clicked on "Returns at These ETFs Could Shock You"). Anyway, it seems to imply these double leverage ETFs could go down to zero. Could that happen? If the market goes up, could URE just stagnate and stay down? These ETFs now seem very bizarre to me. I can understand trading the non-leveraged ones like XLF and IYR, but weird correlations seem kind of scary.
  2. Leveraged ETFs only track an index accurately intraday. There is a wide divergence the longer you hold them.

    The URE is the other side of the SRS. The SRS and SKF are getting a lot of volume driving down the UYG and URE to incredibly low levels. However, you can expect 20 - 30% returns should a strong short cover rally hit.

    Below is a link I found of use:

  3. Oops, I meant to say the weird correlations in the double or triple leveraged ETFs.

    Anyway, yeah, you could have a rally at any point in time now. But, I have another sort of odd question. What if URE went down to like $0.50 and it would pay a dividend. I mean, the REITs have stopped paying dividends to protect themselves, but what would happen in 2 or 3 years if they start paying them again and the dividends surpass the price you paid for the ETF. Would that be impossible? Would they just shut down the ETF?
  4. anarcho