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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Kayaker who wrote (117814)	2/16/2009 2:41:52 PM
From: axial	Read Replies (1) \| Respond to of 206131

Seems the same logic - "contango effect" - would apply to leveraged ETFs in other commodities... like gold. One would think there's a "backwardation effect" too. With some differences (e.g., rollover scheduling, etc) all leveraged ETFs (bull and bear) appear to function the same way. Complaints note that often they don't track the fundamentals. Trying to chart the inputs and the outcomes, it appears the best time to make money is in periods in between rollovers. Another potentially attractive time might be when there's a flip between backwardation and contango: a move from equilibrium. Watching HGU trading on TSX real-time, there also appears to be a play on daily trading - CIBC in particular. They appear to be playing the volatility resulting from real-time gold price movements; playing the sentiment. Saw the same patterns with HOU when crude spiked around New Year. --- Low-volume leveraged ETFs are dangerous, high-volume seem to have inputs from different players with different plays, in addition to the variables caused by the ETF itself. Constructing a javascript or Excel chart that matches inputs to outcomes is fruitless. Expected return doesn't necessarily work. Made better than 40% on leveraged ETFs, but only using (mostly) short-term plays and quick exits. Online explanations about leveraged ETFs are helpful and true, but don't tell the whole story. You can make good money with leveraged ETFs, but you'll never know why, LOL. FWIW Jim