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  • Leveraged ETFs: Making Volatility More Volatile? [View article]
    Also, doesn't it strike anyone as odd that the negative article referenced here was written by Barclays...a direct competitor to the leveraged ETF providers. One would have to assume that for every dollar invested or traded in the leveraged ETFs would be two or three dollars NOT invested in the Barclays ETFs...
    Apr 28 09:31 am |Rating: +2 0 |Link to Comment
  • Leveraged ETFs: Making Volatility More Volatile? [View article]
    inthemoney
    Leveraged ETFs actually STOP creating or redeeming shares in the last 30 minutes of the day. This is the only time the market isn't as impacted by these positions, and this is when it has been the MOST volatile. Perhaps removing the leveraged ETFs may create MORE volatility or more downside, as people have to put more money at risk or feel as those they have little or no downside protection, so they just outright sell.


    On Apr 27 11:34 PM inthemoney wrote:

    > > Leveraged ETFs came out in late '06 and really got going in '07
    > and '08. Can't we think of other things that might have caused increased
    > market volatility, such as issues surrounding an epoch credit crisis
    > and challenge to the viability of our financial system, not to mention
    > the recession that went along with it.
    > ----------------------...
    >
    > We see 2% moves almost on daily basis in the last 30 min of trading.
    > I think it is a high time somebody looked into this. If it was the
    > economic situation that made the market super-volatile, it would've
    > been distributed throught the day (and there is some of that) but
    > the 90% is in the last 30 min.
    > For anyone watching markets daily it is very very obvious. A lot
    > of people can actually predict the moves, and front running them,
    > thus making the move even bigger. The last 30 min move is usually
    > the opposite of the move on that day, but in the direction of the
    > previous day (if that was opposite). If the previous day was in the
    > same direction, then the last 30 min is in the direction of the day.
    >
    > Now, if I can figure it out, what the Wall Street wizards with power
    > tools are doing with this information, what do you think?
    Apr 28 09:26 am |Rating: +1 0 |Link to Comment
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