19709

Why Leveraged ETFs Are Bound to Deteriorate

You obviously did not read the article closely enough. The author was saying that if the index fell to 900 and the 3X fell to 700 an 11.11% increase in the index back to 1000 would not be sufficient to return to 3X to 1000. It would take an increase of 14.283% in the index equivalent to an increase in the 3X of 42.85% to return the 3X to 1000. While your math is OK, your reading comprehension is not.


On Jul 15 08:58 PM mwfall wrote:

> THE AUTHOR IS 100% WRONG. HIS ARTICLE IS WORTHLESS AND HE'S A MATH
> DUNCE.
>
> HERE'S HIS MISTAKE:
>
> take the triple levereged one.
> when it goes from 100 to 70 the percentage loss is calculated by
> dividing 30 into 100 equals 30% (he was right on that one)
> when it goes from 70 to 100 the percentage gain is calculated by
> dividing 30 into 70 equals 42.85% gain !!