Big Dog's Boom Boom Room Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Big Dog's Boom Boom Room

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Big Dog who wrote (123507)	8/21/2009 11:34:27 AM
From: Salt'n'Peppa	Read Replies (3) of 206223

ETFs have a time decay associated with them. Fees, contract rollover and daily settlements all eat away at the ETF share price over time. Going short, you get the benefit of share price change as well as a "bonus" of time decay if you hold it for more than a month or two. The decay is significant with HOU, which is why I prefer to short it rather than buy its counterpart, HOD. Back in early June when WTI first topped $72/bbl, HOU traded at $10.80. WTI hit $72 yesterday and HOU managed to reach $9.70. That's over 10% time decay in just 9 weeks! The downside of this strategy is that you are taxed at full rate on shorting (at least here in Canada), but I have a lot to write off against these small gains so this is the way I choose to play it. Hope this helps. S&P

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next