I don't get you silly longs. FAZ simply is too high risk to trade. There are many on this board who ignorantly say that FAZ is only a day trade. Really?? The market can turn in a second and banks have been in an uptrend for months now. Why don't you simply go long FAS or the banks and eliminate the downside risks? Stocks always go back up, ETFs like FAZ can go down forever. I assume many of you got long, then got trapped in FAZ and stayed in it hoping it would turn, and it didn't. There will be another reverse split in FAZ. Shares are basically worthless if you've been holding FAZ.
I posted an analysis earlier which proved that you should never go long FAZ or FAS. Rather, if you think the market will go up you should short or buy put options on FAZ. If you think the market will go down, you should short or buy put options on FAS.
Due to the structure of ETF's, and the fact that they incur trading costs, margin costs, fund management fees, and - in the case of FAZ - dividend payments, their nature is to go down. If the market goes up by 1%, FAZ will decrease by MORE than 3%. If the market goes up by 1%, FAZ does not increase by 1%. The same is true of FAS for the opposite scenario.
You can verify this for yourself in Yahoo's description. The fund has a stated goal of achieving -300% returns on a portfolio of russell 1000 financial stocks - BEFORE costs.
Here it is as a quote:
"The investment seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the performance of the Russell 1000Â® Financial Services Index. "