Replies to post #49301 on Traders Cooperative

[AD]

good piece cdseller, thanks

[Joe Stocks]

cd, Thanks for the article. I am starting to think the same. It seemed so nice to be able to double up with these ETF's across a broad base of stocks. But, it appears you can be right about direction but lose if you hold too long.

Looks like they are better played short term.

[Taxmantoo]

I think double and triple leveraged ETFs are great, for shorting.

You think a sector is going down? Short the triple leveraged long ETF.

You think a sector is going up? Short the triple leveraged short ETF.

When you do it that way, you gain an edge equal to the fund management and transaction costs plus the inherent losses from the "buy high, sell low" bias in the leveraged ETFs. (when the fund has gains, it needs to buy more at a higher price to maintain its leverage ratio, when it goes down, it has to sell)