both uwti and dwti drop over 50% in a year, same kind decay for most of the 3x etf year over year. Can you find a pair of 3x etf that raise together, even not 50%, in a year? If you cannot find such an ”unexpected” result then in practical world most 3x etf just decay over time. It is real and happens everyday but you dont believe and you cannot find any prove then you better just dont invest.
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My personal experience shows 3x etf is not a fair game
- Thread starter GloriaBrown
- Start date
both uwti and dwti drop over 50% in a year, same kind decay for most of the 3x etf year over year. Can you find a pair of 3x etf that raise together, even not 50%, in a year? If you cannot find such an ”unexpected” result then in practical world most 3x etf just decay over time. It is real and happens everyday but you dont believe and you cannot find any prove then you better just dont invest.
Investors need to take responsibility to understand the products that they trade in. There are risk "disclosure documents (link above)and they explain briefly how options are used to attain the leverage in these products. We now have up to 5 years history to look back on to overlay against the underlying products which shows the dreadful impact of this daily rebalancing.
People will stop trading these complex products and the conmen who produce them will come up with something else that has no history and is too complex for the average investor to comprehend the risk and the snake oil is sold once more.
People will stop trading these complex products and the conmen who produce them will come up with something else that has no history and is too complex for the average investor to comprehend the risk and the snake oil is sold once more.
Investors need to take responsibility to understand the products that they trade in. There are risk "disclosure documents (link above)and they explain briefly how options are used to attain the leverage in these products. We now have up to 5 years history to look back on to overlay against the underlying products which shows the dreadful impact of this daily rebalancing.
People will stop trading these complex products and the conmen who produce them will come up with something else that has no history and is too complex for the average investor to comprehend the risk and the snake oil is sold once more.
uwti and dwti constructed from 100% of future.
Hi Gloria,
I wanted to read the prospectus for your two triple leveraged products and explain the full mechanics to you as to their hedging techniques and see if we can reconcile the use of futures. I was baffled by Bloomberg saying they use futures only and yet their returns of down 98% suggest significant decay over time. The 190 page prospectus has their hedging techniques buried inside and here is a snippet.
Can you tell me more about the effect of Credit Suisse’s hedging activity?
We expect to hedge our obligations under the ETNs through one or more of our affiliates. This hedging activity may involve purchases or sales of futures contracts included in the applicable Index, listed or over-the- counter options, futures contracts, swaps or other derivative instruments relating to the applicable Index or the futures contracts included in the applicable Index or other instruments linked to the applicable Index or the futures contracts included in the applicable Index, including certain exchange traded notes issued by Credit Suisse.
I have so many issues with these triple Leveraged products that I just stopped reading the prospectus after page 30. These sewer products are as bad as Valeant (VRX) in the words of Charlie Munger.
The fact that both the long and short product are down 98% from their highs after five years tells you there is significant expense or decay in the value of these instruments.
Although Credit Suisse has been successful in marketing these products through Janus and other providers, they feel compelled to delist these products from NYSE and stop marketing them presumably to avoid SEC action or future lawsuits. But rather then liquidating the ETNs they will move them to the pink sheets where they have more flexibility to take even more money from the people who already own them and at some point will want their money back.
So the most popular millennial trading product(according to media)is being delisted from NYSE next week. A ETN product that is unsecured ( no assets or interest earned accrues to investor) and packaged by Credit Suisse Nassau branch(no transparency). This product does not pass the smell test!
I wanted to read the prospectus for your two triple leveraged products and explain the full mechanics to you as to their hedging techniques and see if we can reconcile the use of futures. I was baffled by Bloomberg saying they use futures only and yet their returns of down 98% suggest significant decay over time. The 190 page prospectus has their hedging techniques buried inside and here is a snippet.
Can you tell me more about the effect of Credit Suisse’s hedging activity?
We expect to hedge our obligations under the ETNs through one or more of our affiliates. This hedging activity may involve purchases or sales of futures contracts included in the applicable Index, listed or over-the- counter options, futures contracts, swaps or other derivative instruments relating to the applicable Index or the futures contracts included in the applicable Index or other instruments linked to the applicable Index or the futures contracts included in the applicable Index, including certain exchange traded notes issued by Credit Suisse.
I have so many issues with these triple Leveraged products that I just stopped reading the prospectus after page 30. These sewer products are as bad as Valeant (VRX) in the words of Charlie Munger.
The fact that both the long and short product are down 98% from their highs after five years tells you there is significant expense or decay in the value of these instruments.
Although Credit Suisse has been successful in marketing these products through Janus and other providers, they feel compelled to delist these products from NYSE and stop marketing them presumably to avoid SEC action or future lawsuits. But rather then liquidating the ETNs they will move them to the pink sheets where they have more flexibility to take even more money from the people who already own them and at some point will want their money back.
So the most popular millennial trading product(according to media)is being delisted from NYSE next week. A ETN product that is unsecured ( no assets or interest earned accrues to investor) and packaged by Credit Suisse Nassau branch(no transparency). This product does not pass the smell test!
I think you do not understand the difference between an ETN and and ETF? The ETN returns exactly what it says it will, 3X or -3X the daily percent return of the underlying unless the issuer goes bankrupt which has not occurred in this case. I challenge you to show me a day when these two funds did not produce exactly 3X or -3X their underlying index?Hi Gloria,
I wanted to read the prospectus for your two triple leveraged products and explain the full mechanics to you as to their hedging techniques and see if we can reconcile the use of futures. I was baffled by Bloomberg saying they use futures only and yet their returns of down 98% suggest significant decay over time. The 190 page prospectus has their hedging techniques buried inside and here is a snippet.
Can you tell me more about the effect of Credit Suisse’s hedging activity?
We expect to hedge our obligations under the ETNs through one or more of our affiliates. This hedging activity may involve purchases or sales of futures contracts included in the applicable Index, listed or over-the- counter options, futures contracts, swaps or other derivative instruments relating to the applicable Index or the futures contracts included in the applicable Index or other instruments linked to the applicable Index or the futures contracts included in the applicable Index, including certain exchange traded notes issued by Credit Suisse.
I have so many issues with these triple Leveraged products that I just stopped reading the prospectus after page 30. These sewer products are as bad as Valeant (VRX) in the words of Charlie Munger.
The fact that both the long and short product are down 98% from their highs after five years tells you there is significant expense or decay in the value of these instruments.
Although Credit Suisse has been successful in marketing these products through Janus and other providers, they feel compelled to delist these products from NYSE and stop marketing them presumably to avoid SEC action or future lawsuits. But rather then liquidating the ETNs they will move them to the pink sheets where they have more flexibility to take even more money from the people who already own them and at some point will want their money back.
So the most popular millennial trading product(according to media)is being delisted from NYSE next week. A ETN product that is unsecured ( no assets or interest earned accrues to investor) and packaged by Credit Suisse Nassau branch(no transparency). This product does not pass the smell test!
I know you don't like to read things beginning to end, but read this thread beginning to end and you can see what the impact of daily percent returns has on a fund vice it's index. It's funny that you're essentially saying "idiot millennials" in your post when you yourself don't even understand the fundamentals of ETFs and ETNs let alone the impact of daily returns on leveraged ETFs and ETNs. And can't be bothered to read an entire prospectus before passing intense but predictably incorrect judgement on it.
Hi Gloria,
I wanted to read the prospectus for your two triple leveraged products and explain the full mechanics to you as to their hedging techniques and see if we can reconcile the use of futures. I was baffled by Bloomberg saying they use futures only and yet their returns of down 98% suggest significant decay over time. The 190 page prospectus has their hedging techniques buried inside and here is a snippet.
Can you tell me more about the effect of Credit Suisse’s hedging activity?
We expect to hedge our obligations under the ETNs through one or more of our affiliates. This hedging activity may involve purchases or sales of futures contracts included in the applicable Index, listed or over-the- counter options, futures contracts, swaps or other derivative instruments relating to the applicable Index or the futures contracts included in the applicable Index or other instruments linked to the applicable Index or the futures contracts included in the applicable Index, including certain exchange traded notes issued by Credit Suisse.
I have so many issues with these triple Leveraged products that I just stopped reading the prospectus after page 30. These sewer products are as bad as Valeant (VRX) in the words of Charlie Munger.
The fact that both the long and short product are down 98% from their highs after five years tells you there is significant expense or decay in the value of these instruments.
Although Credit Suisse has been successful in marketing these products through Janus and other providers, they feel compelled to delist these products from NYSE and stop marketing them presumably to avoid SEC action or future lawsuits. But rather then liquidating the ETNs they will move them to the pink sheets where they have more flexibility to take even more money from the people who already own them and at some point will want their money back.
So the most popular millennial trading product(according to media)is being delisted from NYSE next week. A ETN product that is unsecured ( no assets or interest earned accrues to investor) and packaged by Credit Suisse Nassau branch(no transparency). This product does not pass the smell test!
Their official page shows they 100% hold future of specific month of oil future but I am not surprised if they trade option daily or somehow to achieve 3x daily. Anyway the decay may comes from the very detail of it and it is evil. I am not surprised they may even short both themselves by some channels.
I think you do not understand the difference between an ETN and and ETF? The ETN returns exactly what it says it will, 3X or -3X the daily percent return of the underlying unless the issuer goes bankrupt which has not occurred in this case. I challenge you to show me a day when these two funds did not produce exactly 3X or -3X their underlying index?
I know you don't like to read things beginning to end, but read this thread beginning to end and you can see what the impact of daily percent returns has on a fund vice it's index. It's funny that you're essentially saying "idiot millennials" in your post when you yourself don't even understand the fundamentals of ETFs and ETNs let alone the impact of daily returns on leveraged ETFs and ETNs. And can't be bothered to read an entire prospectus before passing intense but predictably incorrect judgement on it.
I dont know how many times we have told you that we are discussing the holding weeks to year case not day trade case.
down98% from their highs over last four years means decay, not “unexpected result” like you said. Welcome to find a pair of 2x or 3x etf that raises together for a good amount. It doesnt exist. The mean or median of 2x or 3x etf is big drop in general.
Then congrats, you've found a guaranteed money making machine! Just short them both and you'll soon be rich. Let me know how that works out for you.I dont know how many times we have told you that we are discussing the holding weeks to year case not day trade case.
down98% from their highs over last four years means decay, not “unexpected result” like you said. Welcome to find a pair of 2x or 3x etf that raises together for a good amount. It doesnt exist. The mean or median of 2x or 3x etf is big drop in general.
even just daily speaking it has a high percent of days not close to exactly 3x. It is pure their and game trap.