A **leveraged ETF** is an ETF which seeks to deliver some multiple (frequently 2x) the **daily** performance of a benchmark index. However, over multiple days it will **not** return 2x the index. **You should not buy and hold a leveraged ETF for any more than a couple of days at a time.**

learn more… | top users | synonyms

0
votes
1answer
57 views

How do leveraged ETFs (index tracking) set intraday pricing?

I'm curious specifically about the pricing mechanism of leveraged ETFs, and specifically 3x - let's take SPXL as an example (3x S&P500 bull etf). I know that this fund is designed to track the ...
5
votes
2answers
319 views

Do index tracker funds (ETFs) typically pay dividends?

When you invest in a fund, such as a FTSE 100 tracker, do you get the benefit of dividends? I understand the FTSE 100 index does not include dividends. Of course, if you held the share basket ...
1
vote
2answers
48 views

How do currency ETFs track the spot prices? And which amount one has to invest for full hedge?

I've got a couple of doubts about how currency ETFs work. How do they track the spot price? For example, I was checking the FX pair GBPUSD, I've seen: Spot price GBPUSD: $1.5382 ETF long GBP short ...
4
votes
4answers
1k views

Understanding downside of triple-leveraged ETF

What happens to the price of the triple-leveraged ETF if the S&P 500 loses more than one-third of its value (i.e., the return is below -33 1/3%)? Does it mean the value is equal to zero?
0
votes
0answers
36 views

Is a single-asset ETF's holdings derivable from its market cap?

Let's consider USO Oil ETF. They track WTI Crude Oil contract. At the close 30/04/2015: they held 46,485 WTI futures their closing price was 20.51 their market capitalisation was 2,772.95m USD front ...
1
vote
1answer
120 views

Why are there no exchange traded options on 3x leveraged ETNs

Since these would help me manage risk in my personal financial portfolio, why are there no exchange traded options on 3x leveraged ETNs? Is there a prohibition that the SEC is perpetuating? Is there ...
0
votes
1answer
112 views

Why an ETF mirrors the underlying index on a day to day basis but not on a long term basis

Some ETFS like NUGT,DUST say that they replicate the performance of the underlying index on a daily basis. My first question is, do all ETFS do this, or only some? Also, why does it say that "not ...
2
votes
1answer
135 views

What Russell 2000 price action would move TZA on the upside back to its 6000 level?

Is it possible to see TZA at 6,000 ever again? What kind of decline in the Russell 2000 would it take? Since TZA was originally at 6000 and now at 15, is it possible, with a huge future downturn in ...
4
votes
2answers
2k views

Geared ETFs - Do they offer more than 3x leverage?

I'm very interested in geared ETFs. It appears that the highest available gear ratio is 3x the underlying security (or index). Is this due to regulation, mathematics, or market demand?
-3
votes
1answer
513 views

What is the daily rebalanced leverage ratio that is ideal for the S&P 500 based on past performance?

This question assumes an investor with a very low risk-aversion coefficient. The risk-aversion coefficient is basically the 2nd-derivative of an investor's utility function as a function of money. An ...
6
votes
5answers
876 views

Can you beat the market by investing in double long ETFs?

Certain ETFs double the daily rate of return of certain indices. Can you use such ETFs to beat the market (not on a risk-adjusted basis, just in terms of pure returns)? I have read that When ...
11
votes
5answers
840 views

Investing in a leveraged index ETF for retirement. Risky?

I'm 23, and in addition to my 401k at work, I have a few thousand saved in an IRA. Right now I have it sitting in Treasurys earning around 3%. Over the past 50 years the S&P has averaged around ...