Index futures vs. Leveraged ETFs

Discussion in 'ETFs' started by cunparis, Aug 8, 2008.

  1. I'd like to buy euros for a medium term hold. Can someone tell me the difference between buying 1 EC contract and buying FXE?

    From what I see the margin requirement for EC is $2400. So if I buy 1 contract at 1.474 and it goes up to 1.50 I calculate:

    1.50 - 1.474 = 0.026

    1 point = $.0001 per Euro = $12.50 per contract

    0.026 / 0.0001 = 260 pts

    260 * 12.50 = $3250.

    That's a return of 135%.

    Now if I buy FXE, for $2400 I get 16 shares. 150-147.4 = $2.6

    2.6 * 16 = $42

    I must be missing something here, that's 77x leverage.
     
    #21     Aug 29, 2008
  2. Done 777

    Done 777

    Comparing DJIA fut and DIA, how wide is average spread on fut and DIA?
     
    #22     Oct 4, 2008
  3. MrBurns

    MrBurns

    you would not want to hold levered etfs for the long haul due to daily reset. go to the proshares website for more information. essentially over time there will be a lag/tracking error.
     
    #23     Oct 4, 2008