Replies to post #2442 on VelocityShares Credit Suisse 3X Long Crude ETN (UWTIF)

[RBKissMyAs]

Just hold a core UWTI, then buy the dips on both with a tight stop. You stop out, the other goes up. The swing doesn't stop out, it goes up.

[value1008]

Thanks for your post, Spanky. I submit that the reason DWTI went up 7-fold (making an evenly distributed investment in both DWTI and UWTI a 100% gainer over the time period) is because there was SO VERY LITTLE VOLATILITY on the very rapid ride down from $105 WTI oil to $44. Had it taken several more months and--most important-- MORE VOLATILE UP/DOWN SWINGS on the overall ride down, DWTI would not have zoomed all the way into $190s in Jan.

So the big hope for those adopting a "buy & hold" strategy with UWTI is that the ride up to $80+/barrel oil is as SMOOTH AS POSSIBLE :-)
--i.e., as little volatility as possible on the upward ascent.

That will allow "compounding gains" to defeat the "decay-over-time" phenomenon.


(NOTE on compounding gains: e.g., if UWTI was at $4.00 and then there were five straight days of 10% gains each day, UWTI would not have gained just 50% but would have moved up to $6.44, a 61% gain.)