Discussion in 'ETFs' started by yamazee, May 26, 2009.

  1. yamazee


    Hi Guys,
    I'm fairly new at this so I have to warn you that I am somewhat a simpleton when it comes to trading and investing. I am currently holding 1,000 shares of SSO that was at a cost of 26.86 per share. I dont know much about what I am doing with it other than researching what that ETF was at when the markets were better VS where it is now is a difference of night and day. My though when I purchased it was that at 26.8 per share if I hold it long enough it can only go up over the long run. So I guess I have made it a fairly long play.

    What are some of your thoughts on SSO? Do you think holding it long term is good or bad idea? I am not trading to make a living and only put in what I can be comfortable loosing. I also did the same with URE at 3.82 per share. Although I am loosing a few bucks on both right now, I still gotta believe both will come up significantly in the long run. Especially the URE, at somepoint housing and real estate has to recover some? Any opinions form some you more experienced folks would be greatly appreciated. Thanks for your insight.:confused: :confused:
  2. yamazee


    geeez, thanks for all the replies!! :mad:
  3. l2tradr


    Read up on how leveraged ETFs do over the long term, understand the math behind it and you'll have your answer. Hint: SSO is meant to track DAILY performance on a 2:1 basis. It's path dependant.
  4. it's S.O.S.
  5. Hi Yamazee!
    Congratulations on your SSO. I envy your decision, specially when you do not have to bother with the small daily fluctuations and your intentions is to hold it for the long run.
    When the S&P500 was on the middle 1500 in the last quarter of 2007, SSO was trading around 96, and 14 back in March when the S&P was below 700.
    Nobody knows the future, but if we think wishfully that the S&P do not trade again below 700, we may conclude that the alternative is to look for much higher prices in the long run for the S&P500 and its double mirror, the SSO. As things improve and America rebounds, the sky is the limit. 1550 on the S&P and 14000 + in the Dow will be hit again and surpass. I'm not predicting that, it is common sense, history and the belief of many investors.
    Which brings a point: If I were in your shoes (or high heels if you are a girl?), I will write out of the money covered calls, every month (MB Trading or IB) and mint little coins on years to come. If the stock is called away on any monster market move, that will be a win win situation (buy it again), otherwise gives you a little cushion and perhaps another small stream of monthly income.
    Personally, I trade almost every day the SSO for few cents move, and buy and sell SSO/SDS on my retirement account where I can not short SSO or SPY.

    Ditto on your position of URE, or the mirror of Real Estate.
    We read on the papers (WSJ) that we'll face another 1.7 million foreclosures on the next 12 months, but watch it when the R.E rebounds for good... URE will be a fantastic winner, it may outrun SSO (due to the lower price, $4 vs $28).
    With both symbols SSO, and URE you are looking at a very bright investment future.

    From the Safe