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ProShares UltraShort Silver Message Board

  • monpecknie monpecknie Apr 9, 2011 12:26 AM Flag

    Little help here please

    Here is the problem. My girlfriend trusted me to manage her investment account. I sold her mutual funds and bought all SPY. When SPY did nothing I sold most of it and bought ZSL hoping to beef up her returns. Her balance is a little less than 1/2 of what it was a few months ago. Yea, I know I F..ked up.

    My question is can she get all her money back if she says she did not know what she was investing in? What do you guys do when stuff like this happens.

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    • re "can she get all her money back if she says she did not know what she was investing in?"

      She almost certainly can't get it back from the broker particularly if it was an online trade that a broker didn't approve. She could sue you if you didn't have permission but it sounds like you did.

      If we're not talking about a huge amount of money and you guys are young I'd recommend chalking it up as incredibly irresponsible and if you learn a lesson and don't fuk up again this won't mean much in the long run. An ultra short hot commodity ETF is like extreme gambling with the odds stacked against you over time because of the way the ETF is structured It's an easy way to lose a fortune instead of participating in a bull market.

      I just bought some as a quick trade but I know I'll lose most of my money if I'm wrong and it's only a tiny piece of my portfolio. And make sure she knows about it or things can get worse.

    • I hope you followed my recommendation to buy AGQ. I recommended you buy AGQ on April 11th, the closing price on that day was $254.30. Right now, the after hours price for AGQ is $369.50, a 45% gain in a little over 2 weeks! You would be well on your way to making your girl's money back. Look, parabolic moves always end in an ugly fashion, but nobody knows how high silver is going to go. Gold has gone "parabolic" There's a ton of buying power coming from all over the world. Buying AGQ and bumping up your stops as the price increased was the easiest way to make money over the past two weeks. I really hope you at least tried.

    • Well, if you want to go for broke: sell the ZSL, buy two tickets to Fiji, invest whatever remains in AGQ.
      In two weeks, you either recover enough to be able to come back with her, or you give her the straight and you get to stay in Fiji.
      Either way, you'll have a great vacation.

    • Sometimes it pays to read the fine print, lol.

      If you click on the 'profile' link, which is a couple of links below the 'message board' link, that will take you to page with a description of this ETF.

      On the right hand side of the page there is a section entitled 'Fund Summary'. The first sentence there says "The investment seeks to provide daily investment results (before fees and expenses) that correspond to twice (200%) the inverse (opposite) of the daily performance of silver bullion as measured by the U.S. Dollar fixing price for delivery in London."

      There is a lot of meat in that sentence. The key word is 'daily'. Usually, for this type of ETF that means that the fund resets after each market close. This 'resetting' process causes a decay in the fund. Here's the easiest way to explain it. Let's say you buy in at $100/share. Silver goes up 5% in a day, so this drops 10% that same day (200% of the inverse). so you are at $90. The next day, silver drops 5%, so you go UP 10%, and 10% of 90 is 9, so you are at $99.

      So even though silver is unchanged over this hypothetical 2-day period, you are down 1%. In other words, it is very easy to lose your arse with this type of ETF, even if silver goes sideways while you hold it. You really have to be a good guesser and market timer to make money here.

    • You really messed up badly. You can do two things: 1. Borrow money and pay for the losses yourself or 2. Just tell her you are sorry, you tried your best.
      I would never do what you did becuase it puts you in a lose-lose situation. I would feel bad about losing a penny of a close friends money. Good luck.

      • 2 Replies to MCROC43
      • if an investment in ZSL did not work, and you are hoping for a reversal, you can almost completely lose all that is left in your ZSL investment. Silver shows no signs of a reversal of any importance. The trend down for ZSL since its inception is pretty much all you need to know about how owning ZSL is a really bad idea, and how unlikely it will go up any significant amount.

      • Thanks for not being a know it all basher. I think I am alright since sliver cannot go much higher. It has to come down and when it does it may drop over 60% from here.

        Becky hardly ever looks at her statements. She knows the market is up and probably still thinks she has mostly mutual funds. I still think this will probably work out.

    • Call the suicide help line for both of you!

    • Buy AGQ...duh.

    • Short ZSL and make a quick $10, but make sure you get head!

    • tell her you have something important to talk to her about, but could she give you head first.

      That way, if she dumps you after you tell her you lost her money shorting silver, you'll still have gotten something useful from her.

    • Good god, you actually think you can get your money back 'somehow' by saying you didn't know what you were doing?! Are you kidding me? How did you even get to the point of being able to ask that question and not immediately realize that you are an idiot?

      Lol and she just handed you her investment account?!

      You two were meant for each other!

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