Allen,
My first response to you is that my post was only meant to be a "caution" about using Inverse or Leveraged ETFs -- they do not behave the same way as Basic ETFs because they are not locked to the Index price, but only percentage variations. I have not seen the "Splits" discussed and was really not aware of how that affected AIM's "handling" of the ETFs.
Secondly, I overstated the idea when I said, "I could lose the entire position." Obviously, I would only lose the stock position, if NUGT continues downward. I have already reached my limits on Cash contributions. When I began the position, I already knew it was in a down trend and began with a 50/50 allotment -- then I followed Clive's suggestion of only using 1/3 of the funds allotted to stocks because of it being a 3X Leveraged ETF, so that acts a 33% Stop Loss in and of itself. For example: If I had allotted $20,000 for the position and apportioned it 50/50, only $10,000 would have been assigned to Stocks for the initial purchase. With the Leveraged ETF, only 1/3 of that was actually used ($3,333) for the initial purchase, and another, equal amount, was set aside for future purchases, for a total of $6,666 toward the stock position, the remaining $13,334 was kept in Cash equivalents. So, thanks to Clive for that input.
I just wanted to warn anyone starting a new program not to assume that an ETF is an ETF -- all the same. These Inverse and Leveraged ETFs are not the same as the basic Index ETFs and AIMing them is much like AIMing a really "volatile" stock.
Regards,
Bob
