Shorting these 3x S&Ps?

Discussion in 'Stocks' started by cubical, Nov 29, 2008.

  1. cubical


    As you probably know, overtime these stocks which move in multiples of the S&P or Nas lose value. Example

    SP starts at 100 and SSO starts at 100

    SP goes up 10% to 110, SSO goes up 20% to 120.

    Next day

    SP goes down 10% to 99, SSO goes down 20% to 98.

    So overtime if the market goes up and down the SSO will lose value even if the SP goes slightly up or remains the same.

    So would it be smarter, rather than using inverse ETFs, why not short Long Multiple ETFs? The 3x ETFs would have an even greater loss of value.

  2. I believe this was already answered as not possible or really not a good idea.

    Reasoning is the way they leverage these 3x ETF's make it towards them being Bull or Bear and you play the one you want.

    On the other thread someone tried it and it would not go through.

    TNA BGU = Bull

    TZA BGZ = Bear
  3. Nanook



    BGU: Large Cap Bull 3x Russell 1000

    TNA: Small Cap Bull 3x Russell 2000

    ERX: Energy Bull 3x Russell 1000 Energy

    FAS: Financial Bull 3x Russell 1000 Financial Services


    BGZ: Large Cap Bear 3x Russell 1000

    TZA: Small Cap Bear Russell 2000

    ERY: Energy Bear 3x Russell 1000 Energy

    FAZ: Financial Bear 3x Russell 1000 Financial Services
  4. Rocko1


    What if spy goes does 5% at t=1

    spy= 95
    sso= 90

    then goes up 10% at t=2

    spy= 104.5
    sso= 108

    then sso > spy at t=2