I am short several 3x ETFs, the inverse ones, so I am effectively long. But I don't want to buy those, as that will trigger tax on my gains. So instead I want to short their inverse, the 3x long counterparts, and have as absolutely as small net gain/loss on the positions going forward - I want the ups on one to as closely as possibly exactly offset the downs on the other and vice versa. So let's say I am short $100 of SPXS. So to offset it I short $100 of SPXL. Now let's say the market has a huge down day, S&P 500 down 3.33%. My SPXL drops 10%, to $90, while SPXS rises 10%, to 110. There is a $10 gain which exactly offsets my $10 loss. So, if I didn't do any buying or selling, if the next day the S&P 500 had another huge down day, down 3.33% again, my SPXL drops 10% to $81, my SPXS rises 10%, to $121. So, I'm up $19 on my SPXL, but down $21 on my SPXS. The reason I think this happens is because each day these levereged ETFs or ETNs rebalance their futures to try and make them 3x (or whatever their leverage ratio is) of whatever they track the next day. So I think if you don't rebalance along with them you will have a whipsaw where after long what you started with as almost perfectly offsetting positions become less and less offsetting the further the underlying moves in one direction over time. So, how to fix this? I think this does NOT mean that one has to sit there each day buying and/or selling the securities to keep them in perfectly equal total balances. I think what it means is that, to stay as flat as possible, at 3:59 eastern each day one should buy/sell the two so that the short balances are perfectly equal. Does everyone agree? Or would one have to do some crazy stuff in the aftermarket? Thanks!