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Shorting all ULTRA etf's is stupid



April 21, 2009 – Comments (2)

It has been shown that shorting all leveraged etf's will over the long term provide you with a positive score and accuracy points for all picks.  It is not however the best way to use those tickers within CAPS.

Instead, if you think the SP 500 or a sector will go down short the ultralongs.  If you think the sp 500 or a sector will go up short the ultrashorts.

At least attempt to demonstrate some market timing ability.  If you get it wrong at least you pick will turn green at some point in the future.

2 Comments – Post Your Own

#1) On April 21, 2009 at 10:32 AM, checklist34 (98.75) wrote:

i actually think that its pretty smart.  i ran a study for real-life use where i plotted the outcome of shorting matched pairs of levered ETFs and 100% of them dropped significantly over the past 6 months. 

i planned to use the scheme to profit in real life but couldn't find a significant amount of shares to short. 

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#2) On April 21, 2009 at 10:56 AM, RVAspeculator (28.21) wrote:

HAHA...   Is this directed at UltraSuck?   

Why try to time things when you can win no matter happens if you just short them all?

Its safe to say that if you went long FAZ at 100 or SRS at 200, or UYG at 37 you will NEVER get back to green...  ever.

They are all trending toward zero.   Look at FAZ and FAS for a good example.

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