trading the SSO

trading the leveraged ETF of the S&P right now. how much of a difference is there between this and the ES?

 

bump ba bump ba bump

 

For a daytrade, not much difference. For a multi-day trade, more of a difference, basically when it goes against you for more than a day it compounds how much it goes against you.

So, if you are doing some sort of averaging down strategy expecting a return to mean, definitely not the instrument to use.

 

Can recommend the BGU/BGZ pair. SSO/SDS is all good but nowadays there is better options.

 

Hi antincedo,

May I ask in what context that you're asking you question? These are two different intruments and are quite different in many ways.

The Ultra (2x) S&P ETF (SSO) is a favorite of mine to trade. I also trade the ES emini future. The big difference is the leverage and the other is the tax differences to consider (especially on the leveraged ETF). Unfortunately, I cannot answer tax questions.

Both instruments have plenty of volume (liquidity) so pick your poison.

Happy trading,

d-

 

Not sure if I understand this. How does it "compound" how much it goes against you??

 

Here's an explanation.
http://www.indexuniverse.com/component/content/article/1/2817.html?magazineID=1&issue=114&Itemid=12

 

Thanagar,

Great link, mate. Thanks.