I consider or considered myself a smart trader. I made tons of money buying puts on homebuilders and banks over the last few years. But, I did not do my homework on srs and etfs in general. They are a fucking scam. Thank god this is december and I can take my losses against major profits. I got out at 55.50 a few minutes ago. Wow.
The funny thing is, I thought this was less risky than options. Fuck the fed, treasury, and government for bailout nation. I will get my revenge when I pay my taxes. You guys wouldn't believe the chatter I hear from small business and 1099 filers. People are talking about flat out refusing to pay any taxes at all. Let the government try to track all of them down.lol This country is toast.
Anyway, I just invested back into the options game. Fuck etf's.
The market can stay irrational a lot longer than most of us can stay solvent. I also got my ass handed to me on this stock. I made a lot of money shorting banks and home builders over the past 2 years and lost a big chunk of that on this thing in the past month or so.
ah well, live and learn. Having said that though. I still think that over the next year, this thing is certain to go up, because the companies it represents aren't going to be geting better, they will be getting worse.
It is called the degradation factor. Go read the prospectus or do the math
on these leveraged ETFs
I suggest you solve the following formula
x = %up day in underlaying
y= % down day in underlaying
The formula is (1+2x)(1-2y)
You will find the degradation factor that will kill this ETF even if the underlying stayed at the same level after a while