Velocityshares 3X Inverse Natural Gas Etn (DGAZ)

[surehands]

Read this from another board and poster!



weazelboy Saturday, 12/24/16 08:09:25 AM
Re: TTT post# 26524
Post #
26525
of 26607 Go
A R/S on a leveraged ETF is not the same as a R/S on a penny stock. There is no dilution created so it's not the scare tactic some claim it to be. It just simply means that you have less shares, but still the same amount invested.

For example, if you invested $10,000 at $10.00/share...you would have 1000 shares at your initial investment.

Let's say NUGT does a 5:1 R/S at $5.00. You would then have 200 shares (1000 divided by 5) at an average of $50.00/share ($10.00 x 5). After the 5:1 R/S, NUGT price would be $25.00 ($5.00 x 5). Regardless, you would still need the price to double to get back to even...whether that was $5.00 to $10.00 or $25.00 to $50.00 after the R/S.

The primary risk is if the downtrend would continue it becomes more difficult to recover losses (if at all), but you will never be at risk of losing more than your original investment of $10,000.

Hope this helps.

PS- yes, Shariah Law is coming either this week or first week of January. We'll see if that has as big of an impact as some are claiming it will.