ericinNE

Ultra and Inverse ETFs: The Downside of Doubling Up

It's odd how the returns for the SSO/SDS ultra's seems to miss the doubling result when the return is positive, but meet or exceed the doubling when the return is negative. Friday results illustrate this perfectly, albeit anecdotaly. SDS went up 3.32% in a downtrend day, but SSO went down 3.89%. SPY was down 1.94% I haven't figured out the why of this, but it does hold up, mostly. Random day historical evaluations of QLD/QID are better correllated, on average, for some reason. I use the ultras as very short term trades, with tight trailing stops for losses. (Accepting small losses in pursuit of exaggerated gains.) Works pretty good. Averaging returns of about 3%/week, since the start of the year. Not too bad, IMHO. But, I'm only putting about 25% of my portfolio value on one of these 4 ETFs, on any given day, and rarely holding past the end of the day. Anybody else here doing something like this? QID had a +26.5% return for 1/2/08-3/31/08 continuous hold. SDS +19.2% same/same. I did +39% (+32% after trade costs.) Probably get my ass handed to me Q2.