how to hedge a 3x etf

[Sig]

I give up.

You started saying this



I showed above that, when two portfolio's with the same initial dollar amount invested over longer period leveraged etf portfolio in-fact did better. Now you are just repeating look at the chart. Chart does not tell you squat, when leverage is involved. It is better to look at same initial dollar outlay of the typical investor and then compare.

He's not only clueless but dangerously clueless because he is so willfully ignorant that he can't be bothered to read a prospectus or run a mathematical model. It's hilarious that he actually describes the mathematically expected behavior of a daily return fund in choppy vs trending markets, but apparently it's all "magic" to him! It is a matter of mild curiosity for me how guys like this manage to make their way through life.

 

[srinir]

Man, Why don't you test your theory.

We look at your favorite SDS. Two portfolio's of $10000 of similar characteristic initially
1) Long 30% SDS and rest in cash
2) Short 60% SPY and rest in cash (short dollars also in cash)

Start from Jan 2007, so initial entry is more than 10 years ago no re-balancing.

Leveraged etf portfolio still does better

 

[sandp500trader]

2008 10k investment in SDS = 348 in 2018.

If the market returned to 2008 levels the investment would be at around = 1, 700.

Wow, that's a big difference between 10,000 and 1, 700. What happened? What magic took place here? How could this be? I'll tell you the secret, wait for it, the secret is that leveraged ETFs suffer from deterioration. Tada. That's the truth. That's what for some reason you really don't want to admit. In choppy markets, that deterioration happens at a far quicker pace, than in a directional market.

 

[srinir]

You don't have clue about differences in trading & investing or leverage & no leverage.

Good luck in your journey