Don't Miss Out On Great Gains! - Best Investment Newsletter


Don't miss out! Subscribe Now

Search For More

Wednesday, March 18, 2015

Beware Leveraged ETFs: List of Leveraged ETFs for Traders

Here is a list of leveraged ETFs posted by Scott on Silicon Investor
I prefer ETFs that do not use leverage.  If you are day trading 1% of your portfolio into a 3x leveraged ETF, why not use 3% in a lower expense ETF such as DIA , SPY or QQQ?

This graph shows SPY vs. its 2x and 3x ETFs, SPUU and SPXL, respectively.  You can clearly see the slippage and the ratios sure are not 2 and 3x on a YTD chart with two months and eighteen days.

Learn the "Core and Explore" approach to investing
with "Kirk Lindstrom's Investment Letter"
Subscribe NOW and get the March 2015 Issue for FREE!   
(Your 1 year, 12 issue subscription will start with next month's issue.)

This graph shows SPY vs. its 2x and 3x ETFs, SPUU and SPXL, respectively on a 5 day scale:

Warnings.  
  • Leveraged ETFs get leverage at a very high price so they can lose money in a flat market. 
  • I DO NOT RECOMMEND holding them overnight.
  • Leveraged ETFs are really only for day traders who believe they can make enough from market timing to offset the high expenses.


Kirk Lindstrom's Investment Letter Performance

Followers (New)