List of all 3x and 2x ETN
- Thread starter bellman
- Start date
Thank you! That was very helpful.
I am going to make a csv of the US leveraged ETFs.
another ETF resource www.etfdb.com
2X and 3X funds don't decay. They rebalance daily. There's a big difference, in fact they're completely different. I'd humbly suggest that you're setting yourself up to potentially suffer a big loss on a hedged position you thought couldn't lose if you don't first understand that.
I'd look at the volatility ETFs if you want to talk about decay. Again no risk-free profits there, but they actually are decaying which is what it sounds like you're looking for.
The title of this thread is about ETNs--there is no daily re-balance of ETNs because they are unsecured debt securities, not funds. ETNs do decay (and by decay, I mean daily returns are compounded, so theoretically they could go up exponentially, but in reality, their stochastic nature eventually results in decay).
As for levaraged ETF's, I do not understand exactly what those are-- you can't return 3x the underlying without at least partially being a debt security. Could you give an example of a couple of 3x ETFs so I can research them?
Finally, I have no idea who or what you are responding to when you advise "no risk-free profits there" and "I'd humbly suggest that you're setting yourself up to potentially suffer a big loss." Maybe you are being humble (I don't think you are), but WTF are you responding to?
As for levaraged ETF's, I do not understand exactly what those are-- you can't return 3x the underlying without at least partially being a debt security. Could you give an example of a couple of 3x ETFs so I can research them?
Finally, I have no idea who or what you are responding to when you advise "no risk-free profits there" and "I'd humbly suggest that you're setting yourself up to potentially suffer a big loss." Maybe you are being humble (I don't think you are), but WTF are you responding to?
My wording was perhaps a bit sloppy. Many don't realize that a 3X ETF or ETN returns 3X the daily movement of the index it tracks, which can lead to unexpected results if the investment is held over time. It sounds like you do understand that, though.
In general I was referring to a common mistake, that I also made when first looking at 2X and 3X funds, of assuming that you can go short a 2X or 3X and long the underlying in the right ratio and make a profit off the "decay" of the 2X or 3X. I found there is no decay due to inefficiency of the funds. If you rebalance both sides of your portfolio every day to match the daily return specifications of the funds, then you find the ETN's in fact actually match their index almost exactly. If you don't rebalance, then you might make money and you might lose it, it's completely path dependent and the randomness of your returns are no different than just buying the futures, i.e. you don't really get any hedging. I'd also maintain that there is no natural "decay" that would cause a 2X or 3X to always eventually go down. It's just math as long as they track their index as they claim, which they seem to do. I'd highly recommend putting together an Excel spreadsheet and looking at the path dependency of a bunch of scenarios, it makes it really clear if you're a visual person. Again the volatility futures and ETFs/ETNs do have this decay quality, so I'd really recommend looking at them based on what you've mentioned so far.
On the ETF vs ETN question, Profunds are all ETFs I believe. TQQQ would be one of their 3X ETFs. Theoretically you might get more tracking error in the form of decay with an ETF vice ETN, but my research doesn't find it. I would theorize that they just swap between their long and short funds and there is enough balance there that they can keep their internal losses to a minimum.
this is not limited to the post above as I have read several of your contributions to threads on ET as of late.
You Never contribute to a thread. You mostly lecture and point out other member's short comings, however, the short comings are all coming from you. You mostly like to hear yourself talk and in most every instance, give out very flawed advice and explanation. This above post is a great example.
I read the OPs topic and wanted to come here and find out about 2x and 3x ETNs. Then I had to experience your lecture when clearly you had not even read the topic correctly. And this happens in many threads that I encounter here.
Seems, each evening, you 'thumb' through this site as a television diversion and inject your lectures as you see fit...bestowing upon us morons (who actually come here as traders to learn and share) the truths that we need...kind of like a stranger listening to others conversations in a public sitting area and interrupting with distorted and strongly biased options until you lead the poor souls into a tirade of religious/political rants...