Tue, Mar 3, 2015, 4:24 AM EST - U.S. Markets open in 5 hrs 6 mins

Recent

% | $
Quotes you view appear here for quick access.

ProShares Ultra Oil & Gas Message Board

  • minskbelarus47 minskbelarus47 Mar 2, 2009 3:43 PM Flag

    How is DIG leveraged?

    Altho it holds stocks, my research show that this is a leveraged fund. How is it leveraged?

    XOM only down around 3.5% today, but the rest of the holdings are getting killed.

    Ol' Boone has to be wondering what the heck is going on. So much for those wind turbines.

    Good topics on energy on Seeking Alpha BTW.

    MB

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Read the prospectus, you'll find DIG and DUG close out daily, and the close out becomes the basis for the next days' pricing.

      Because of this mathematical phenomenae, a trend in motion staying in motion has a mutliplier effect, compounded by a market that mistakes DIG and DUG for oil plays.

      So todays downward ten percent, if followed by five percent more tomorrow, could reflect as much as a 20% downtrend.

      That's why these models are dangerous. Even at "rest", the daily commissions rendered by the Proshares folks make the value of this ETF dwindle to zero, probably in a matter of 18-24 months.

      Think of these ETF as option plays, you'll be closer, not perfect but closer to the way they work and price out.

      • 2 Replies to yourdeadmeat69
      • I take it you are not enamored with DIG?

        My view is that nothing is going to happen in the market until next fall at the earliest... So, between now then, I see this maybe going up some, then down some, and repeat that cycle until we finally capitulate on the market to the downside. I don't think we have hit it yet. Buffet says there is more bad news to come. Pick a price, get in with a lot, move a few points, get out with a lot plus some....and set stops to the downside...

        I see this as a rolling stock, going sort of sideways. I don't short stocks, but have played the inverse funds, which I am now out of...

        Any thoughts appreciated...

        mb

      • if you really think that short DUG to go long oil.

 
DIG
52.19-0.81(-1.53%)Mar 2 4:00 PMEST

Trending Tickers

i
Trending Tickers features significant U.S. stocks showing the most dramatic increase in user interest in Yahoo Finance in the previous hour over historic norms. The list is limited to those equities which trade at least 100,000 shares on an average day and have a market cap of more than $300 million.