Open Question

Is investing in a short ETF a bad idea?

This article explains how they can work against you:
http://www.thestreet.com/story/10454678/1/why-short-sector-etfs-arent-so-smart.h
tml

What do you think?

Asked by StockCentral 1 month ago - 14 answers - 2803 views
previous pagePage 1 of 2next page
Go to page:go

UGG Boots outlet online sales,
Cheap UGG Boots discounts,
UGG Boots Sale
UGG Boots Outlet
UGG Boots Clearance
UGG
Adirondack Tall Boots

href="http://www.uggbootssaleworld.com//UGG-Adirondack-II-Short-Boots-5469/">UGG
Adirondack II Short

Rate Now: 1 2 3 4 Average Rating: 0.00 / 0

Every day, or so it seems, new research shows that some aspect of lifestyle -
physical activity, diet, alcohol consumption, and so on - affects health and
longevity. Physical fitness is good bodily health, and is the result of regular
exercise, proper diet and nutrition, and proper rest for physical recovery. The
field of nutrition also studies foods and dietary supplements that improve
performance, promote health, and cure or prevent disease, such as fibrous foods
to reduce the risk of colon cancer, or supplements with vitamin C to strengthen
teeth and gums and to improve the immune system. When exercising, it becomes
even more important to have a good diet to ensure that the body has the correct
ratio of macronutrients whilst providing ample micronutrients; this is to aid
the body in the recovery process following strenuous exercise.
642-982 ,
642-983 ,
646-046 ,
646-205 ,
646-230 ,
646-364 ,
646-578 ,
646-656 ,
646-671 ,
646-985

Rate Now: 1 2 3 4 Average Rating: 0.00 / 0

burberry outlet stores that
introduced these new burberry outlet


mall
which seems to be in extrem fahsion way definitely would sold well in
the market. As for the fact that the


burberry outlet
that do not foured among the world range, however these href="http://www.burberry--outlet.com/"> burberry featured products

that come in extrem popular and common for these consumers. It is said that
the burberry outlet online that
come

with high reputation and earns high reputation among the consumers. Also where
you can get the burberry products


and burberry outlet stores
products.These burberry outlet

mall

Rate Now: 1 2 3 4 Average Rating: 0.00 / 0

tyeag--
I've been looking into just this sort of strategy and my analysis indicates
that shorting both the long and short leveraged ETFs would almost certainly make
you money over the long run and make you money almost all the time over the
short term as well.

I've posted a blog entry on thestreet.com
http://caps.fool.com/Blogs/ViewPost.aspx?bpid=128700&t=01001041985086961848

(a fellow fools reply led me here)

I've also decided to post my excel files for anybody interested. They weren't
exactly made for public consumption, but I think if you dig around a bit you'll
be able to figure out where the numbers come from.

Basically I downloaded historical price data for URE-IYR-SRS & UYG-IYF-SKF and
looked at a few things. I created a column for how close to the 2X ratio the
leveraged funds tracked the index fund--surprisingly well overall. Next I
created the ability to analyze how well they did over different holding periods
and allowed comparison to the "theoretical" values. Just change the value in
cell A1 to set the holding period. "Theoretical" values were calculated using
exactly 2X ratios to the daily change of the underlying index fund. Again the
difference from theoretical was usually (acceptably?) small and almost always in
the same direction--down.

target=_blank>URE-IYR-SRS.xlsx
target=_blank>UYG-IYF-SKF.xlsx

Rate Now: 1 2 3 4 Average Rating: 0.00 / 0

tyeag--please see the Q&A, where I answer this and other questions.

Eric

Rate Now: 1 2 3 4 Average Rating: 0.00 / 0

So if going long it both the long and short ETF causes a big losses (instead of
breaking even as you would think), why not short both the long and short ETFs?
If someone shorted the UYG and the SKF they would be way up. Has anyone tested
this to see if it would really work?

Answered by tyeag - Bookmark this User - Ignore this user
1 months ago - Report Abuse

Rate Now: 1 2 3 4 Average Rating: 4.00 / 1

Hey Gang--thanks for the response. I tried to answer some of the
questions/comments people had in a new piece over on realmoney.com. Thanks
again and happy holidays.

Eric

Rate Now: 1 2 3 4 Average Rating: 3.00 / 1

Interesting analysis. Agreed on the long term non-viability. Still, for swing
or even day trades in this volatile market I have made more money with DXD than
anything else I trade.

Rate Now: 1 2 3 4 Average Rating: 2.00 / 1

well my post got cut off because this site somehow dosent let certian characters
to be posted

(even though people can post random videos)

but go to stockcharts.com, then pull up a 2 year chart of IYR, SRS, URE. youll
see that investing in SRS wouldve wiped all your gains out at this point.

where as if you shorted IYR or URE, you would still be sitting pretty on nice
gains.

there is something quite odd about these and i think the average investor has no
clue what actually moves these funds.

Rate Now: 1 2 3 4 Average Rating: 3.00 / 1

the ultra shorts are going to go down as one of the great scams on the retail
investor. maybe even everyone. if you look at the price charts, theyre very
different than the underlying, AND, very different than the ultra longs. there
is something quite fishy about them.

i use them as trading vehicles, nothing more.

IYR
http://stockcharts.com/h-sc/ui?s=IYR

Rate Now: 1 2 3 4 Average Rating: 4.00 / 1

previous pagePage 1 of 2next page
Go to page:go
Get started with stockpickr! Get recommendations from thousands of mutual funds, hedge funds, and others. Enter your favorite stocks now!
brokerage partners
connect with Stockpickr
Fan us on FaceBook
Follow us on Twitter