Posted:
#1
Does anyone play with this group of choices???
Seems to be the "logical" play to me.
Your input is greatly appreciated!
Ultra Short ETF's ???
Views: 209
Posts: 5
Posted:
#3
i posted the following info in another post on this board. It is important to know, because some people say, "hey, the XXX etf is down 20% on the year, but the double inverse etf is only up 5% this year. why isn't the double inverse of XXX up 40%?"
some people just jump into things without knowing what they actually are (I was one of them). i'm a big fan of the double leveraged etfs, but make sure you know what you are involved with. here's the post i mentioned:
the problem with double inverse ETFs like SKF is that they track the DAILY performance, not overall performance. so let's do some math:
UYG is the index that SKF is the double inverse of. let's say they are both at 100 to start, making it easy:
UYG 100
SKF 100
Day 1, UYG goes down 2% so SKF goes up 4%
UYG 98
SKF 104
Day 2, UYG goes up 5%, so SKF goes down 10%
UYG 102.9
SKF 93.6
Day 2, UYG goes down 2.82%, so SKF goes up 5.64%
UYG 100
SKF 98.88
UYG gets back to the same place, SKF trails. The only way SKF is a good LONG TERM hold, would be if UYG NEVER goes up. SKF should be for traders only, as should all inverse ETFs.
If you want to bet against the financials for the long term, short the XLF index. if you want to make some leveraged trades, buy SKF, but i wouldn't hold it for months at a time.
I didn't know the effect of the Daily Performance factor of these ETFs when i was heavy into them earlier this year. It is important to know. People that are smarter than me might be able to figure out some techniques for guaranteed money, like shorting both the long and the short index at the same time.
Posted:
#4
thanks for the response and the enlightening information.
SKF is the instrument of choice I am considering for long term play.
What instrument whether it be a stock, a fund or an etf has the best chance of making moves in the short term for better long term results??? I thank you for your opinions.
Posted:
#5
The market has bottomed stay away from the short side for now. Take a loom in about 12 to 16 weeks. The reversal we saw on Jul 15 was for real. However Oil and commodities stock will still sell off. The stocks that did the best in the last quarter will be the weakest in this quarter and the weak ones will be the stong ones
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