TIMING INDEX MUTUAL FUNDS Message Board

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Strategies & Market Trends : TIMING INDEX MUTUAL FUNDS

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To: donald sew who wrote (112)	2/10/2000 4:25:00 PM
From: Follies	Read Replies (3) of 428

There are some unique characteristics of USPIX 1) It is the only bearish instrument (bearx and ursa excluded) which provides unlimited bearish upside, limited downside and no time premium or expiration. 2) Although it is approximately 1.8 beta if the market were to go up 100% you would not lose 180% of your money so the actually beta approaches some asymptote. 3) The most interesting factor is how your position increases as your equity grows, this is the opposite of a short. Example, if you short a stock at 100 and it drops to 90 your equity increases to 110 but your short position is only 90 so as a percent of equity you are now only 90/110 ~= 81% invested short. You must reshort any increase in equity to remain 100% short. USPIX does this automatically for you. They must be shorting as the NDX is dropping (and of course buying as the index goes up). All this without the risk of the market turning against you and going into a margin situation. Almost too good to be true.

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