Well... that's a different issue, isn't it?
Stated another way... "What if I don't have the stones to stomach the volatility necessary to make huge gains"? Lotta traders have that problem. Doesn't change the facts.
Last edited:
Shorting SPX using SPXU
- Thread starter js4682603
- Start date
Well... that's a different issue, isn't it?
Stated another way... "What if I don't have the stones to stomach the volatility necessary to make huge gains"? Lotta traders have that problem. Doesn't change the facts.
Thanks, my reasoning leaning towards SPXU is they won't expire like options and I know I will eventually be right. I guess "They" don't want everyone doing this. That's why the internet is filled with articles on why these should not be used long term. Just like every article about heart disease says to "limit" alcohol and never to "eliminate" it.
Thanks, my reasoning leaning towards SPXU is they won't expire like options and I know I will eventually be right. I guess "They" don't want everyone doing this. That's why the internet is filled with articles on why these should not be used long term. Just like every article about heart disease says to "limit" alcohol and never to "eliminate" it.
Lots of "cautions" about expecting "exactly 3x" performance for day trading. The cost of leverage plus day-do-day noise in issues excludes "perfect 3x" comparison. The "big picture" is different.
Hedging isn't 1:1 perfect. Having a hedge to protect/offset from the "bulk" of a move against you should be your objective.
Last edited:
Yes, I understand. Thanks
Even if I lose 10k (1000 shares of SPXU at $10), it's nothing compared to what I could lose in options.
Yes, I understand. Thanks
Even if I lose 10k (1000 shares of SPXU at $10), it's nothing compared to what I could lose in options.
The object of a hedge is to keep you from losing BIG in an uncertain environment.... regardless of your vehicle and how you play it. Sometimes the hedge even makes you a bit of money.
Hedging isn't a path to success in intself.... it's a "risk management" tool. "Going to cash" is a hedge, too.
Speaking of hedging...
Some would say, "I'm hedged... regardless of what the market does, I won't lose much".
OK... especially if your trading objective is to "not lose much"... but that also means "I can't make any/much money, regardless of what the market does".... gains in one position are offset in another.
If you want to make any kind of REAL gains... you need to take a "large, unhedged position and get it right." At some point, you need to "stick your neck out".
Yeah, I understand.... that's not the meme every trader wants to accept... it's the truth, nonetheless.
You cannot "hedge your way to success".
Some would say, "I'm hedged... regardless of what the market does, I won't lose much".
OK... especially if your trading objective is to "not lose much"... but that also means "I can't make any/much money, regardless of what the market does".... gains in one position are offset in another.
If you want to make any kind of REAL gains... you need to take a "large, unhedged position and get it right." At some point, you need to "stick your neck out".
Yeah, I understand.... that's not the meme every trader wants to accept... it's the truth, nonetheless.
You cannot "hedge your way to success".
Last edited:
The way I see it, if S&P goes to 4000, my 1000 shares of SPXU may be at $7.5 or even $5 but they won't expire. When the bear market does happen and SPX comes down to 2000(50% correction), my 1000 shares of SPXU maybe worth something(don't know how much) which help offset the 401k. Sort of permanent "PUT" option.
uh oh! knew it was too good to be true.
That's why I am trying to learn how to calculate SPXU values at various stages of S&P.