/biz/ - Business & Finance

They're proud of you /smg/. You did good today

>>29476015
SSO is a 2x leveraged ETF based on the S&P 500 and it is one of the few leveraged ETFs that existed before the Financial Crisis of 2008. Had you bought SSO at the top of the market before the recession in 2007, as of this moment, you would have gains of 176%. Had you bought SPY on the same day you would have gains of 98%. So had you bought the leveraged ETF, even at the worst possible time, you still would have ended up with almost double the gains.
Remember this the next time somebody throws shade on leveraged ETFs because of volatility decay. Buy the index based leveraged ETFs and win.
More specifically, really all ETFs suffer from volatility decay including unleveraged ones so if you premise avoiding leveraged ETFs on that reason, you shouldn't buy unleveraged 1x ETFs either because e.g. 0.5x would "decay" even less. But that logic implies 0.25x would be even better still, and so on. This is obviously absurd taken to it's conclusion but that is the implication of what is commonly advocated.
What's being missed is there is nothing magical about 1x leverage. As a matter of fact, historically in most market environments worldwide 2x daily leverage is about the sweet spot. The only glaring exception is Japan (due to their insane recession) where 0.5x would bizarrely have been most appropriate.
The conventional wisdom behind these ETFs as "trading tools" also is simply not true. All these ETFs do is increase beta exposure in much the same way that buying high beta stocks increase beta exposure. Practically speaking, there's little difference between a portfolio of stocks with an average beta of 2 and a 2x levered S&P 500 ETF. The risks are the same. Yet, no one goes around calling AMD (which has a beta of 2.83) a single day "trading tool" or a scam. In fact, holding AMD is way riskier than holding a 3x S&P 500 ETF!
This would be known if anti leveraged ETF bloggers actually read the literature or God forbid thought for themselves
Hope this helps brother

SOXL executive team trying to hold the price down for new frens

>how can other ETFs even compete?

>>29141124
The SOXL executive team is on the gound.. repeat they have been spotted on the ground, we are a go, over

>>29134431
Fear not. You are in Elysium and have already made it

>>29066123
>fngu>soxl
No options. FNGU needs options and a track record to be a serious alternative to the mighty SOXL