Questions tagged [leveraged-etf]
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.**
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Are leveraged risk-parity portfolios too good be true?
I was reading the bogleheads forum and it seems that lifecycle investing or leveraging a mixed portfolio of stocks and bonds have popular topics for a while now. Whether you achieve it through box-...
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Stock Splits Question on ProShares UltraPro QQQ
What am I doing wrong here? The price of 1 share of $TQQQ was $0.43 in Feb 2010, today the price of 1 share of $TQQQ is $ 54.76, and the stock has split as follows
02/25/2011 2 for 1;
05/11/2012 2 ...
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Long Term Investing in leveraged ETFs such as TQQQ [duplicate]
I am currently investing in TQQQ. My plan is to keep it for the long term. I have read that long term investing in leveraged ETFs is bad. Is that true? If it is I do not understand why since the stock ...
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availability of high multiple leveraged ETF in developed world [closed]
Is there any country or exchange where highly leveraged ( such as 5X, 8X or 10X ( instead of 3X) ETF/ETN are available for trade. I remember seeing something like this in news but could not locate ...
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Aren't options priced asymmetrically for Inverse and Leveraged ETFs, for the same underlying index?
I ask merely about pairs of Bear (Inverse) and Bull (Leveraged) ETFs for the same underlying index. The Bear ETF's price shall be bounded below by 0. But the bull ETF's price is unbounded.
But doesn't ...
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wash sale with leveraged ETF
If a person sales regular ETF ( suppose QQQ) at a loss and buys a leveraged ETF on similar Index e.g TQQQ within 30 days, will the loss on QQQ be treated as wash sale ?
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At the time when market opens what is the best way to know if market will go up or it will go down [closed]
I know markets are driven by multiple factors and any news, any time can cause market to go up and down. Assuming there is no major event/news during the day, at the time when market opens, what is ...
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Is there a better expected return on investment than with ETFs accepting higher variance? If yes, what is the maximum?
My understanding (a bit oversimplified, ignoring inflation etc.) is:
I do nothing with my money: Variance is 0, expected return is 0.
I put my money in ETFs: Variance is positive, expected return ...
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Who is counter party to leveraged ETF e.g TQQQ
I was looking at return of TQQQ, and was surprised with result.
I understand that, it is not equity based ETF, and is using derivatives. But I could not understand who is acting as counter party of ...
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Vanguard 500 Index Fund ETF, fixed income? [closed]
It seems some ETFs pay dividends other are fixed income. How can I know the one I'm interested in (i.e. Vanguard 500 Index Fund ETF) pays dividends or have fixed incomes?
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Can a leveraged ETF's net assets suddenly go below zero?
When trading stocks on margin or when holding futures, sudden price movements may wipe out the posted margin. In some cases, the trader may even lose more than the posted margin (i.e. the trader owes ...
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Is a market-tracking leveraged ETF more reward for same risk?
Due to the way gains compound on one another, and the daily resetting of leveraged ETFs, a 3x ETF will yield MORE than 3x of the underlying asset (in a bullish market), sometimes up to 10x gains in a ...
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Why wouldn’t I invest in NYSE:UPRO over something like NYSE:IVV? [duplicate]
I recently came across this 3x leveraged etf of the S&P 500 (NYSE:UPRO). I understand that it’s a risky investment, but I still see way more reason to buy it over any other thing that tracks the S&...
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Does a one stock leveraged ETF behave like margin?
I am reading about leveraged etfs and I am very confused. It seems they don't always follow the stock prices they should be following and not always doing what they are supposed to do.
For example a ...
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DEGIRO: Is Debit Money better than an MMF-ETF short for leveraging?
I was looking into the options of leveraging my main index fund by a certain amount and was recommended to use Degiro's inhouse credit product "Debit Money". Current annual cost: 1.25% pa
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Is investing in 2x QQQ (QLD) the same as investing in my account buying QQQ but making it 2x using my margin?
It seems to matter for the following, if the increase or decrease happens evenly over 30 days vs if it happen overnight, for the case of Account 1, but does not matter for Account 2. So what if (1) it ...
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Does TQQQ get wiped out if it QQQ drops 34%? But what if after I purchase, it first went up 50% and then down 34%? (100 to 150 and then back to 100) [duplicate]
Since TQQQ is 3x the leverage of QQQ, so the conventional wisdom is:
When TQQQ drops 34%, then it is all "wiped out" (meaning a $100 investment will go to $0 now). And TQQQ itself is also ...
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Why don't index ETFs use leverage to offset their fees and eliminate tracking errors?
If a hypothetical stock index returns 100%, an ETF tracking the index might only return 99% because of ETF fees. This introduces tracking errors. Why don't index ETFs use leverage to offset the fees ...
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I invested in a leveraged (x3) ETF but it does not grow as the underlying index. What went wrong? [duplicate]
I invested in Ayalon Extreme S&P 500 which is leveraged S&P.
But its graphic does not follow the graphic of S&P.
This is S&P which recently improved historic maximum:
And this is the ...
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Taxation of capital gains on leveraged ETFs
Are capital gains on leveraged ETFs in the USA given a tax treatment different from the tax treatment given to capital gains on stocks? Leveraged ETFs use derivatives to generate their returns, and ...
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Why do inverse ETFs reset daily?
I looked at some of the popular inverse ETFs such as ProShares Short S&P 500 (SH), ProShares UltraShort S&P 500 (SDS), Direxion Daily S&P 500 Bear 3X Shares (SPXS), ProShares Short Dow 30 (...
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What, exactly, are the "S&P 500 index swaps" held by UPRO?
I've thought about investing in UPRO, the ProShares UltraPro S&P500 3x leveraged ETF. But, of course, I don't want to invest in it until I have a good understanding of it, including its historical ...
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UCO reverse split make average cost cut in half
Before the 2020 April reverse split of UCO Proshare, I hold 39797 shares of UCO with an average cost of 1.4282 USD/share.
After the 1-25 reverse split, as far as I understand, the number of shares ...
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Leveraged ETF myths, warnings, and SPXL long?
I read an article called "3 of the worst ETF's for long term investors" and it says SPXL is one of them.
The reason it gives is:
"If the S&P 500 consistently goes up over time, the SPXL will ...
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Ride leveraged inverse ETF long term in bear market?
I saw this question Why are daily rebalanced inverse/leveraged ETFs bad for long term investing?
And from the answers it looks like everyone agrees they're a bad idea, however the graph on SPXU for ...
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Have leveraged short ETFs lost equity?
I would like to take some hands-off, leveraged short positions of the global market, or portions thereof.
There a many leveraged short ETFs. On looking at them, unsurprisingly the value of them has ...
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How to find equivalent US or Worldwide ETFs that are compliant with European PRIIPS regulations?
I used to invest in the following hyper-diversified portfolio :
+--------+--------------------------------------------------+-------------+
| ticker | Exchange-traded Fund ...
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Leveraged NASDAQ ETF outperforms 3x non leveraged NASDAQ ETF?
I was reading article an about leveraged ETFs on seekingalpha and found this:
High-beta strategies have the potential to help you achieve your goals. Of particular interest is the fact that having 33 ...
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Do the rebalancing costs of leveraged ETFs really outweigh the leverage?
I read the answers from the following two posts describing why daily leveraged ETFs are a bad idea to hold in the long term:
Investing in a leveraged index ETF for retirement. Risky?
Why are daily ...
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Is there evidence that in the long-term, leveraged ETFs perform poorly?
I came across an interesting question: "Why are daily rebalanced inverse/leveraged ETFs bad for long term investing?"
Despite the topic, the answers there actually illustrated the hypothetical risk ...
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When do you buy/sell leveraged ETFs?
There is a little bit of a gambler in me so since I started trading with Robinhood a year ago, I decided to play with my funds a little and try to swing trade inverse ETFs (mostly SQQQ and SDOW).
...
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How can an EU citizen best hedge NASDAQ?
Background:
I have a NASDAQ-heavy portfolio, and wanted to use the SQQQ ETF (Short leveraged Nasdaq-100 ETF) as a way to hedge on days when I expect the whole index to go down (one sub-question here ...
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What prevents leveraged ETFs from exceeding their underlying value in times of high demand?
For example, today SPY decreased -3.17% and therefore the 3x Bear SPY ETF, SPXS, increased 9.85% - roughly equivalent to 300% inverse (310%).
What if you somehow foresaw the decrease early in the ...
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Do the holders of an inverse ETF bear "unlimited" risk
We all know these two things:
Inverse ETFs bet against a pool of stocks. This might include short selling the stocks and buying puts.
Short selling has a limited upside but an unlimited downside.
In ...
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NAV Deviations in 2x ETFs
The funds in question are YCL/YCS. I was looking at the price fluctuations in these funds and noticed they are not priced accurately on an intraday basis. There is decent enough liquidity in these ...
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Loss on US leveraged ETF; Don't live in US anymore
I made an investing mistake many (eight?) years ago. Specifically, I invested a very large sum of money in a certain triple leveraged ETF (the asset has not yet been sold, but the value has decreased ...
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Problems with this strategy to "increase" IRA contribution maximum?
Strategy is outlined here:
Using Leveraged ETFs To Game The Roth IRA Maximum
Essentially, you keep 1/3 of your portfolio in a 3x leveraged ETF and 2/3 in cash. The author claims this combination (...
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Why are daily rebalanced inverse/leveraged ETFs bad for long term investing?
I was reading this article about S&P 500 short ETFs:
https://www.zacks.com/stock/news/176217/4-ways-to-short-the-sampp-500-with-etfs
and I was confused when it said: "investors should note that ...
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VIX and XIV moved in same direction?
Both VIX (S&P 500 volatility index) and XIV (the inverse) decreased price today. Aren't they supposed to have the exact opposite percentage gain/loss intra-day?
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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 S&...
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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 yourself,...
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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 ...
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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?
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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 ...
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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 ...
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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 ...
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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?
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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 ...
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Can you beat the market by investing in double long ETFs? [duplicate]
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 ...
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Trying to understand the toxicity of a Leveraged ETF as a hedge
Using TWM as an example. Long term it looks very crazy. Like back in 2007 it was at $600 and now it is at $40. Let's say I have $10,000 in investing. My plan was to put $1,000 in something like TWM to ...