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A profitable journal with all entries/exits posted in advance
- Thread starter 1a2b3cppp
- Start date
Quote from jb514:
Heading towards zero has nothing to do with tracking errors. It's due to costs and maintenance fees.
thank you for adding so much constructive information..
i consider a tracking error to be where an etf attempts to track 3x the move of an index. so if the index moves 1%, and the etf does not track exactly 3%, then i would call that a tracking error. costs and maintenance fees and spreads on options are all reasons these tracking errors exist.
do you have anything constructive to add?
I meant I don't want to be adding to a position as the price is going up.
When averaging down, you're buying more shares at a better price so it's costing you less per share.
Averaging down into a short position of an inverse ETF is increasing your position at a more expensive price each time.
I was under the impression that the "tracking errors" occurred over a long period of time because the weighted ETFs attempt to do 2x or 3x the performance of the underlying on a daily basis, but as such the long term performance doesn't always end up being exactly 2x or 3x. I think there's even a note about that in the prospectus.
I'll check out QLD vs QID over a longer period of time and see what that looks like.
When averaging down, you're buying more shares at a better price so it's costing you less per share.
Averaging down into a short position of an inverse ETF is increasing your position at a more expensive price each time.
I was under the impression that the "tracking errors" occurred over a long period of time because the weighted ETFs attempt to do 2x or 3x the performance of the underlying on a daily basis, but as such the long term performance doesn't always end up being exactly 2x or 3x. I think there's even a note about that in the prospectus.
I'll check out QLD vs QID over a longer period of time and see what that looks like.
ah okay i get what you are saying, that makes sense
Quote from Daring:
You could close it and transfer the equivalent capital to the other one.
That is actually not a bad idea. The cost would basically be two commissions.
It would change the average cost, too, but I could recalculate everything based on the new numbers and just buy more/less as necessary.
I might just make it simple and sell the SPY and buy like 75 extra shares of QLD. It probably isn't equivalent but it doesn't really matter, I just want to focus on QLD right now.
Then again, that will change my starting amount and make all subsequent adds larger.
I might just close the SPY position and continue on with the QLD as is, because a few points up with QLD will cancel out the loss from selling SPY early, anyway.
One thing that will be different is QLD doesn't pay a dividend, so holding positions for extended periods of time won't pay any extra.
Then again, that will change my starting amount and make all subsequent adds larger.
I might just close the SPY position and continue on with the QLD as is, because a few points up with QLD will cancel out the loss from selling SPY early, anyway.
One thing that will be different is QLD doesn't pay a dividend, so holding positions for extended periods of time won't pay any extra.