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.
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This graph shows SPY vs. its 2x and 3x ETFs, SPUU and SPXL, respectively on a 5 day scale:(Your 1 year, 12 issue subscription will start with next month's issue.)
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.