Silicon Investor (SI) -- The First Internet Community

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 : P&S and STO Death Blow's -- Ignore unavailable to you. Want to Upgrade?

To: Dnorman who wrote (12455)	10/28/2002 9:36:14 AM
From: Steve Lee	Respond to of 30712

They get the levergae thru options. Options are subject to time delay, hence the total combined will not come to 100 except during a period when rising $VXN outweighs the time value erosion.

To: Dnorman who wrote (12455)	10/28/2002 10:50:51 AM
From: 16yearcycle	Read Replies (1) \| Respond to of 30712

D, do a table for yourself using a pretend 10,000 and then adjusting it every days for various daily ndx changes.ie, if the ndx moves down 3% one day and then up 3% three days in a row, and then down 2 days in a row by 3%, what would it be at, vs the uspix? See? It's just the math of compounding retruns. If the ndx goes up 30% in a year, that doesn't mean the uspix will be down 60% at all.

To: Dnorman who wrote (12455)	11/3/2002 6:06:55 PM
From: James F. Hopkins	Respond to of 30712

Dnorman; The 2X funds can be confusing. because the compounding. Which is raising the 1X and 2X to some power. Take the example of 3 straight 10% gains 1X would give you (1+0.1)^3 = 1.33 D1 $10=11; D2 11=12.10; D3 12.10=13.31 so 3.31/10 = 33.1% compounded over the 3 days However 2X would give you (1+0.2)^3 = 1.72 D1 $10=12; D2 12 =14.40 ; D3 14.40 = 17.28 so 7.28/10 = 72.8% compounded over 3 straight up days. as you can see because of compounding 2x on a daily basis does not make 2x up or down over time. The gains (33.1%/72.8% ) are not a ratio of 1 to 2, same thing happens with any other type movement, And as you get more days in the 1X and 2X become even less likely to have the 1/2 ratio. -------------- These two funds ( UOPIX & USPIX ) are risky, & most of the players don't make out. ------------- Another thing that eats up profits in them, is the late day moves.. It just seems most of the time as money flows into funds they push the index high towards the end of the day. ( you pay the closing price) When Money flows out they dump the index late and you get less. ----------------- Most funds can see the rate and direction of in/out flow by 2pm , so they buy some on credit or dump to raise cash .. It's a hidden cost to fund trading. ----------- Big Hedge funds can dominate the close via short term futures..depending on which way they want to move money. Big money rules. ---------------- When I had time to play these ( before back going out on the boat ) I use to watch them and the index every day like a hawk. And most of the days when I traded them , I would lock off a mid day price by using 2X the Dollars in qqqs ( long or short ) to get in or out. Some times that moved against me but I still got out or in at "my" price and not the close price. All in all for the amount I was trading the amount of my time it took up wasn't worth it. -------------- Jim