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Strategies & Market Trends : Take the Money and Run -- Ignore unavailable to you. Want to Upgrade?

To: Jorj X Mckie who wrote (8608)	7/15/2002 11:18:04 PM
From: chris714	Read Replies (3) \| Respond to of 17639

JXM..... I was planning on switching to the Rydex/ProFunds 2x inverse.. etc.. and away from my index puts due to the problems of "time decay" related to options. I still have some index LEAP Puts...but I have been very hesitant to buy any shorter-term Puts. Last year I was burned in options by getting the direction right...but the timing wrong. So I thought the switch to ProFunds would alleviate the time decay prob.. Another poster who apparently trades Rydex frequently claimed that "time decay" remains a problem with these funds as well. He gave me a recent example where the QQQ traded at the same point...10 days apart ...and the Rydex NAV was 3% lower.. I assumed that he was correct in his analysis....and I guessed that maybe "time decay" was still an issue because these 2x inverse funds used so many options. But now I am wondering again....wouldn't they be able to hedge that? I am sure that they are better portfolio managers than I am...and they can figure out how to have a short portfolio without time decay What is the real deal here?? Is time decay involved in these 2x inverse funds? I am hoping that either you or JP can fill me in TIA Chris