Buy and Sell Signals, and Other Market Perspectives 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.

Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives

SPY 690.27

0.0%

Dec 26 4:00 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

Recommended by:

GROUND ZERO™

Justinfo

To: GROUND ZERO™ who wrote (63103)	8/12/2014 10:44:21 AM
From: h_	2 Recommendations Read Replies (1) of 220708

It's a mathematical certainty that, barring a perfectly monotonic unidirectional trend, i.e., every day the underlying instrument continuously rises (or falls) there will be a compounded multi-day return which is far less than the leverage would provide in a single day. As a simple example, assuming perfect leverage, if the underlying starts at 100, and loses 10 points, the 300% long ETF would go from 100 to 70. The next day, if the underlying regains the entire 10 points (an increase of 11.1%), the 300% long ETF would go from 70 to 93.33 (an increase of 33.3%), rather than regain its value at the beginning.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next