Ok you hose heads. I know the combined mental power of the posters on this board is enough to send a man to the moon, cure cancer and HIV and a host of other maladies which plague mankind.
My question to you is this, if SRS and URE are inverse to each other in their position regarding real-estate, then why do their charts look similar? WHY ARE THEY BOTH DOWN FROM THEIR HIGHS OF 2008???
You don't like me, or you don't like the truth? Because everything I've said here is just basic math. Or are you simply in denial that you have been investing in a product that you clearly don't understand?
Once again, work on your reading comprehension. What is 50% doubled? Oh yeah, it's 100%. If the index loses 50% in a day, the index is wiped out.
This is just like buying on margin (well, it IS buying on margin). If you have $20k, and borrow $20k to buy $40k worth of stock, what happens if that $40k gets cut in half? Oh yeah, you still owe $20k and you lost your entire investment.
I think you fail to understand the meaning of mirroring 2x the index.
This is on a percentage basis and not point basis. The index therefore should never go to zero -
Here's an extreme example: FAS (3x ultra financials).
In January, FAS was 25. In July, it was 7.50, and they did what appears to be a 5/1 reverse split. Now, it it 70.00, meaning that if you invested in January, you'd have lost almost half of your investment. In that same time span, the underlying index, the Russell 1000 Financial Services Index, INCREASED by 17%. What killed it is that the index lost almost half of its value before increasing to its current level.
I'm not kingjeremy93, but I think I understand what he said. As long as the index stock that the 2x etf tracks doesn't decline more than 50% in a day, then the 2x etf will never go to zero. There wasn't a day in the meltdown where the index declined more than 50%, therefore the etf is still around, although at considerably less than its original price. Also, any percentage decline in a day has to be countered by a larger percentage increase later for the etf to return to the original value. Obviously, in the indexes these 2x etf's track, that hasn't happened too often.
UYG is the financial counter part of this stock. UYG mirrors the index of $Djusfn by two. This index reached a high of 606 in April of 2007 and a low of 144 in February of this year. THE UYG FUND DID NOT GO TO ZERO NOR MINUS ZERO!
$DJUSRE went from 344 in February of 2007 to 99 in March of this year. THE URE FUND DID NOT GO TO ZERO NOR DID THE FUND GO INTO THE MINUS COLUMN...
Ok Einstein, explain to me what happened...
Yep, they're right. They track daily and therefore only mirror each other in the short term, like this: