Just go long both UPRO and SPXU?

Discussion in 'Trading' started by IronFist, Nov 16, 2009.

  1. Buy equal amounts.

    If market goes down: eventually sell the SPXU and use the profits to buy more UPRO (which will eventually go up because the US economy isn't going to 0)

    If market goes up: you still make money. Over the last 6 months UPRO is up 60% and SPXU is down 46% = net gain of 14% which is probably more than most people made in the last 6 months.


    Is this technically considered "shorting outside the box" or whatever it's called and therefore illegal?

    Otherwise it sounds like win/win :D

    IB"no wai dood u can't do that weighted ETFs decay u will lose all ur monies!!!"

    IBallthepeoplewhosayit'sdumbtobebothshortandlongatthesametimeonthesameunderlyingbecause"you'renetzerolesscommissionsDUH!!!"
     
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  2. Jym

    Jym

    selling equal parts could actually work if it was just a small part of your portfolio and you had a year or 2 to wait on them.

    Take Fas and Faz for example about this time last year they both started out at around $50 and a couple months ago before their reverse splits they were BOTH, yes both, under 10 bucks
     
  3. I've heard of people shorting both a weighted ETF and its inverse and making money, but it seems like with UPRO and SPXU the opposite is true; shorting them both would lose money over time.
     
  4. Jym

    Jym

    that seems true since we've basically just gone straight up the past few months since they were put out.

    As soon as we have a couple choppy months like we had last December thru March you'll see both move down at the same time.

    They're calculated the exact same way as any of the other 3x ETFS they've just lived thru different markets