If FAS drops 20% from $8, then it loses only $1.6. However, if FAZ drops 20% from $49, then it loses about $9.8. If you are looking at the $ amount, it does look like FAS is holding on to its value, but it's not...For those who bought FAS at $10, they already lost 20% of their money lately.
It does appear FAS hasn't had the same time decay in the past few weeks as FAZ. Not sure exactly why this is, however FAS definately had it's share of time decay overall. Both these ETF's have had lots of time decay since they started trading. I admit i'm just bitter at how these leveraged etf's trade. They sound like a good idea in theory and if they followed their respective funds or indexes as they should then could be a useful trading vehicle, but the fact that they don't makes for alot of angry traders that wish they never took a look at these ETF's.
I just hate to see anyone lose money, and would hope people do the their research before throwing money away into these kinds of stocks. There is always alot of new people on these boards that obviously don't understand how these stocks work. I wish i did more research before buying and feeling screwed out of my money. For that i was a fool.
Hey stocktrader, take a look at a one month RIFIN.X chart It's at the same level it was 3 weeks ago just like the S&P chart. FAS is at the same price it was 3 weeks ago. But low and behold, FAZ has tanked 20 bucks! Check it out before mouthing off next time!
I agree - except that writing short term calls seems to be the better strategy - especially if the calls are way out of the money.
Example, you can still get about five bucks for at at the money Feb call with only four trading days to go. If she holds steady, you can then turn around and write the march's (puts or calls) for around $10, I'm guessing.
Granted, the July's at the money are almost $20 - but that's a long way out, and with time decay inevitable, I wouldn't want to bet a lot it's gonna stay at this level - even if the market tanks.