Replies to post #1516 on "~FAnTA$tic DD ~"

[DoubleTop]

If the underlying fund goes Down 5% on Day #1
then it must go UP 5.263% on Day #2 to "Recover 100%".

Therefore in the 3X Fund ...
Day #1 it does Down 15% (-5% x 3) from 100% to 85%
Day #2 it goes Up 15.789% (+5.263% x 3) from 85% to 98.42%

Not quite as bad as your math states.
Yes there is a slow and constant loss in 2X & 3X funds due to the math.
But it will be insignificant if you invest Long/Short correctly.

[~6979~]

thanks for the analysis on the 3x's...its difficult to explain,but I do understand what you are trying to say...please let me know if you come across any unique strategies using them...

...there are some unanswered questions concerning the 3x's that I havent had time to review myself...One topic is concerning the options...it gets complicated because we get into (delta,gamma,theta,vega,& rho)issues... I'm curious as too which moves faster on a big directional move...the less leveraged-side with calls,or the more-leveraged-side with puts???

...every time I get 1 answer...2 new questions pop up...LOL...