On Mar 12, 5:15 pm, Winston.E....@[EMAIL PROTECTED]
wrote:
> these were supposed to move in opposite directions
I've noticed that intraday prices of these ETFs do not always seem to
perfectly track changes in the underlying indexes.
The greater the difference in volume between the long vs short ETF of
the pair, the more noticeable that seems to be.
(Could be an arbitrage op****tunity for some smart young feller not
afraid to gather pennies in front of steamrollers.)
Here are three charts showing the pairs of ProShares Ultra/Ultrashort
index ETFs:
QID vs QLD (NAS)
http://tinyurl.com/28daly
DDM vs DXD (DOW ultra indexes)
http://tinyurl.com/create.php
SSO vs. SDS (S&P500)
http://tinyurl.com/2baw5r
You'll notice that all charts reveal an annualized decline of between
5% and 10% on either side, long or short.
In other words, if you buy and hold any of these you're facing a
systemic annualized loss much greater than the management fee usually
associated with an index fund.
Here's DIG vs. DUG (oil)
http://tinyurl.com/2qrrv6
And here's a new one: FXI vs. FXP (Xinhua)
http://tinyurl.com/2mw6be
(disclaimer: I do swing trade these occasionally. Do your own DD.
These are highly speculative. )
Now, I'd like to believe that these 'ultra' ETFs are exemplars of high
tech stock trading wizardry, flawless program trading software running
on the finest hardware with the smartest street geeks the world has
ever known sprinkling the finest purple pixel fairy dust upon the
server farm. But for all I know these ETFs might could be held
together with not much more than motherspit, some duct tape, and a
yard or two of binder-twinder. Hard to say how they'd handle a really
tough trading day with brokers jumping out of high windows and
whatnot. Might come apart at the seams and move in any weird
direction, off track, up is down and down is down. Who can say for
sure?
There's investing, theres 's speculating. And then there's gambling.
Just do your own DD and make sure you know which it is you're getting
yoursefl into.
Unlike BuffetHater, you should probably do that BEFORE you put your
money at risk (lulz!)
..
..d
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