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  • 10 Clean Energy Stocks for 2009 [View article]
    Tom,

    Your hedge of SDS is good only if you plan on keeping it on a daily basis or few a week or two max. The longer you hold SDS, the more your hedge is actually working against you, rather than for you. The ETF resets daily and thus the tracking is not accurate. Go to google finance and pull up a chart of SPY and then over lay a chart of SDS. Theoretically, SDS should be 2x the inverse of SPY performance over the past year. But, was it? Nope. SPY was -36% and SDS only up 23%. There are a ton of articles out there regarding leveraged ETFs as a poor hedge for the long term. Great short term trading vehicles, poor long term hedges. Shorting SPY is the easiest way to hedge.
    Jan 02 12:13 pm |Rating: +1 0 |Link to Comment
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